HomeMy WebLinkAbout2000-06-19 City Council (21)TO:
BUDGET
’00-’01City of Palo Alto
City Manager’s Repo 2
HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: COMMUNITY SERVICES
DATE:
SUBJECT:
JUNE 19, 2000 CMR: 276:00
RENT REDUCTION FOR THE CHILDREN’S PRESCHOOL CENTER
LOCATED AT THE CUBBERLEY COMMUNITY CENTER
REPORT IN BRIEF
This report transmits staff recommendation to provide a permanent rent reduction to the
Children’s Preschool Center (CPSC) in the amount of $62,280 annually. Staff also
recommends that CPSC’s sublease be amended to extend the lease agreement to December
31, 2004, with no annual adjustment increases.
In May 1998, Council approved a temporary rental assistance to CPSC with the stipulation
that it form a partnership with Palo Alto Community Child Care. This report provides a
summary of the innovations and benefits created by the partnership formed as well as the
fiscal impact of the proposed rent reduction. It also confirms the importance of CPSC as a
significant child care resource to the Palo Alto community both as a provider of high quality
child care and as an advocate for quality child care in the community.
CMR: 276:00 Page 1 of 4
RECOMMENDATION
This report recommends that Council: 1) approve a permanent rent reduction to Children’s
Preschool Center (CPSC) in the amount of $62,280 annually; and 2) authorize the Mayor to
execute an amendment to the City’s sublease with CPSC that would extend the CPSC lease
term to December 3 l, 2004, and continue the rent rate structure of $.23/sq. ft. without a CPI
escalation until the end of the lease.
BACKGROUND
During fiscal years 1998-99 and 1999-00, Council approved a temporary reduction in the
rental rates charged to CPSC, a private nonprofit child care center located at the Cubberley
Community Center. (CMR: 233:98 and CMR: 124:99). The temporary rental reduction was
based upon CPSC and PACCC achieving certain milestones toward the development of a
partnership between the two organizations. The purpose of the partnership was to enable
CPSC to reduce its administrative expenses by integrating certain aspects of its operations
and pooling its resources with PACCC in order to continue to provide high quality child care
services in Palo Alto.
Over the last two years, CPSC and PACCC have worked together to develop and implement
a formal partnership between the two organizations. In mid-1999, the partnership was
approved by both organizations, and both CPSC’s and PACCC’s bylaws were modified to
accommodate the changes to their respective organizational structures. The savings realized
by CPSC from the partnership with PACCC and the City’s rent reduction has enabled CPSC
to continue to maintain its high quality standards for the provision of child care services to
the families of infants, toddlers, and preschoolers in Palo Alto.
DISCUSSION
The City of Palo Alto has long been a supporter of quality child care for working families.
However, despite the City’s demonstrated support for quality child care, there exists a
shortage of quality child care services in Palo Alto. This shortage of child care slots is
primarily due to the inability of child care providers to attract and retain qualified staff.
There are four main reasons for this staffing dilemma: 1) the low wages typically paid to
child care workers: (according to a recent local survey, the average wage for a child care
teacher in Palo Alto is $12.00 per hour); 2) the ever-increasing cost of living in the Palo Alto
area, which is forcing many child care workers to relocate to a more affordable community;
3) the lure of high-paying jobs in the private sector; and 4) the impact of class size reduction
legislation, which has resulted in the need for more teachers at the elementary school level,
thereby draining existing child care programs of their human resources. Consequently, the
child care community in Palo Alto is experiencing a rapid depletion of its workforce. Many
centers in Palo Alto are operating at less than full capacity, despite the fact that they maintain
long waiting lists, because they simply cannot find qualified staff.
CPSC is a very important resource to the Palo Alto community, as it provides approximately
twenty-two percent of the total number of full time licensed infant, toddler, and preschool
slots in Palo Alto. CPSC’s administrative staff plays an active role in city-wide and county-
CMR: 276:00 Page 2 of 4
wide advocacy efforts on behalf of quality child care. CPSC enjoys a good reputation as a
high quality center, and has been accredited by the National Association for the Education
of Young Children (NAEYC) since 1991.
The partnership between CPSC and PACCC has produced additional revenue for CPSC
through combined fund development efforts and the sharing of the services of CPSC’s nurse,
and PACCC’s Human Resources Directorand Controller. In addition, the partnership has
resulted in several significant quality improvements for both agencies. The parmership has
enabled CPSC and PACCC to create and implement a teacher’s salary scale which rewards
academic achievement and length of service, and to coordinate and improve both agencies’
benefits packages through the use of Model Work Standards established by the Center for
the Child Care Workforce.
Additionally, the cost saving from the City’s rental assistance has enabled CPSC to increase
its salary budget by 25 percent over two years, and to renovate and upgrade one of its
playgrounds. These improvements are significant as they increase CPSC’s ability to continue
to provide high quality child care services and to begin to address the issues of child care
worker compensation.
The attached Amendment number 4 to the Children’s Pre-School Center, Inc. Sublease
provides for a coordination of the reduced rental amount, with no annual adjustments, and
extends the lease term until December 31, 2004. The reduced rental ($1,937 month) is the
amount the tenant has been paying since July 1998, as provided by previous Council-
approved amendments to the Sublease, in consideration of CPSC’s progress in developing
a partnership with PACCC. Currently the lease provides for annual rental adjustments in
proportion to changes in the Consumer Price Index. Amendment number 4 will omit that
provision from the Sublease so that the rental amount remains constant. Amendment number
4 also extends the term of the Sublease, currently a five-year term beginning May 1, 1997
and terminating April 30, 2002, until December 31, 2004 to coincide with the termination
date of the Lease and Covenant not to Develop for the Cubberley site.
RESOURCE IMPACT
Approval of the attached amendment to the City’s sublease with CPSC to provide a
permanent rent reduction will result in a decrease in revenues of $62,280 annually. The
reduction in revenues was taken into account during the preparation of the 2000-01 Proposed
Budget.
POLICY IMPLICATIONS
The proposed permanent reduction in the rental rate for CPSC represents an exception to the
City’s existing policy for nonprofit rental rates at Cubberley. However, the reduction is
consistent with past Council action with regard to CPSC’s rental rate, as well as with its goal
of maintaining an adequate supply of quality child care services in Palo Alto, as stated in the
Comprehensive Plan, Policy C-7 "actively work with private, nonprofit, and public
CMR: 276:00 Page 3 of 4
community service organizations to avoid duplication and to coordinate the delivery of
serivces like child care, senior services, and recreation."
ENVIRONMENTAL REVIEW
This program is not a project as defined by the Califomia Environmental Quality Act and is
not subject to CEQA requirements.
ATTACHMENTS
Attachment A - Amendment Number 4 to The Children’s Preschool Center,. Inc. Sublease
Attachment B - CMR : 233:98
Attachment C - CMR: 124:99
PREPARED BY:. Ilene Hertz, Manager of Child Care and Family Services
DEPARTMENT
PAUL THILTGEN
Director, Community Services
CITY MANAGER APPROVAL: ~~~/~) ~/ff~~~
EMIL~I’~,I~SON
Assistant City Manager
CMR: 276:00 Page 4 of 4
Attachment A .
AMENDMENT NO. 4
TO THE CHILDREN’S PRE-SCHOOL CENTER, INC., SUBLEASE
THIS AMENDMENT NO. 4 ("Amendment 4") is made and entered into this day of
2000, by and between the City of Palo Alto, a municipal corporation, (CITY) and
The Children’s Pre-School Center, Inc., a California corporation (SUBTENANT).
go
Do
RECITALS
Eo
On September 1, 1989, the City of Palo Alto and Palo Alto Unified School District
(PAUSD) entered into a Lease and Covenant Not to Develop (Lease) of the former
Cubberley. High School site at 4000 Middlefield Road (Cubberley Site) for the purpose of
developing the site into a community facility and subleasing a portion of it for educational
services and child day care services.
Fo
On May 1, 1997, CITY AND SUBTENANT entered into a (5) five year sublease (the
Sublease) for a portion of the former Cubberley High School site at 4000 Middlefield
Road, Palo Alto, California, to provide for their continued use of approximately 8,772
square feet of building and adjoining ground space for providing child care services. ’
G°
On July 11, 1997, CITY AND SUBTENANT amended the Sublease to provide for a
reduction in rent to the nonprofit rental rate based upon Subtenant[3s obtaining nonprofit÷status.
On June 25, 1998, City and SUBTENANT amended the Sublease to provide for a
temporary six month reduction in rent while Subtenant developed a partnership with Palo
Alto Community child Care (PACCC).
On February 22, 1999, CITY and SUBTENANT amended the Sublease to provide for an
additional six-month reduction in rent while SUBTENANT further developed a
partnership with PACCC.
SUBTENANT has now implemented a formal partnership with PACCC, and CITY AND
SUBTENANT now desire to amend the Sublease to extend the term and continue the
reduction in rent, with no annual adjustments, for the length of the term.
NOW THEREFORE, in consideration of the following covenants, terms, and conditions,
the parties hereto agree.
Section 1.Paragraph IV (TERM) of the Sublease is hereby amended to include the
following:
Effective June 30, 1999, the term of this Sublease shall be extended until
December 31,2004.
Section 2:Paragraph V (CONSIDERATION/RENT) of the Sublease is hereby amended
to include the following:
Effective June 30, 1999, SUBTENANT shall pay to CITY one thousand nine
hundred and thirty seven dollars ($1,937.00) per month due and payable in
accordance with Clause VIII (RENT PAYMENT PROCEDURE).
Section 3. Paragraph VI (REVISION OF RENTALS) of the Sublease is hereby deleted.
Section 4, All provisions of the Sublease and Amendment 1 not amended herein, shall
remain in full force and effect. .
IN WITNESS WHEREOF, the parties have executed this AMENDMENT the day and year
first above written.
CITY OF PALO ALTO (CITY)
(SUBTENANT)
CHILDREN’S PRE-SCHOOL CENTER, INC.
BY: BY:
Mayor
ATTEST:
BY:
City Clerk
APPROVED AS TO FORM:
By:.
Sr. Assistant City Attorney
RECOMMENDED FOR APPROVAL:
By:
Manager, Real Property
By:
Director, Community Services
2
Attachment B
BUDGET City of Palo A’98 ’"99 - .:City Manager’s Report
TO:
ATTN:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER
MAY 12, 1998
DEPARTMENT: COMMUNITY SERVICES
CMR: 233:98
PROPOSED-TEMPORARY RENTAL ASSISTANCE FOR THE
CHILDREN’S PRESCHOOL" CENTER LOCATED AT THE
"CUBBERLEY COMMUNITY CENTER AND APPROVAL OF AN
AMENDMENT TO THE SUBLEASE REDUCING TI~ RENT FOR SIX
MONTHS ’
¯REPORT IN BRIEF
During the pastyear, City staff’has held discussions with the Children’s PresChool Center
(CPSC), a pri~,ate nonprofit child care centerlochted at the Cubbe.rley Community Center.
The discussions have focused onways to reduce CPSC’s operating expenses to enable CPSC
to continue to provide high quality child care services in Palo -Alto. This report details the
content of those discussions and recommends temporarily reducing CPSC’s rental rates by
$62,280 during. Fiscal Year 1998-99, with the expectation that, by July 1999, cPsc will
forma partnership, with Palo Alto.Communfly ~Child Care(PACCC). ’ - -.
233 :~Page 1 of 4
-RECOMMENDATION " .-.
Staff’recommends that Council authon’ze the Mayor to approve an amendment t.o.the City’ssublease agreement with CPSC to provide. a temporary rent reduction in the amount of
$31,140 (Attachment A). The proposedrehtal, assistance, totaling $62,280 during Fiscal
Year 1998-99, would be dependent upon .CPSC and Palo Alto Community Child Care
(PACCC) achieving certain milestones toward the development of a partnership between the
two organizations. In order for CPSC to receive the first half ($31;140) of the proposed
rental assistance, it would have to demonsu~ate by December 1998 that it had agreed to move
forward with a plan to develop a partnership with PACCC. - If by July 1999 CPSC develops
~ partnership with PACCC, then CPSC would receive the second half(S31,140) of the
proposed rental assistance. ..
BACKGROUND
¯ The CPSC, located at Cubberley .Community Center, provides Child care to 150 children with
60 slots licensed for infants (children aged two months through two years), and 90 slots ¯
licensed for preschoolers (children aged two years through five),. CPSC,.licensed by the
"State of California and accredited through the National Association forthe Education of
Young Children (NAEYC), provides 16.5 .percent of the total full-time infant care available
in Palo Alto. This is an extremely valuable resource forthe Palo Alto community, given the
’City’s significant shortage Of infant slots. Since infant care is the most costly care to
provide, many child care centers choose not to serve this populad6r~ ,fo~cusing on the more
profitable preschool population. Out ofatotal of SI licensed child ear~:~er~ters in Palo Alto;
only 13 centers (25 percent) Provide’full-time infant care. Of those centers.that do provide
infant care, often few infant slots axe offered to minimize losses.. Currently; .thereare 3 75
full-time licensed infant slots:in Palo Alto as. compared.with 1;391 fu!l-timdlieensed
preschool slots. ... ....
DISCUSSION
On.May 5, 1997, representatives from.theCpSCmet with the City’s Chi!d-Care Advisory
Committee (CCAC).to discuss its ~aneial situation in light of a. decreasing corporate
subsidy provided-by its parent company, Roche Bioscienee. (Roche). Thediscussion focused
on the.high cost of rent thatCPSC pays to the City for the use of its spa~e at the Cubberley
Community Center ($47/ehild/month), .as compared with the average rent fornonprofit child
care centers in Palo Alto ($1 l/child/month) (Attachment B). . ........
During the next several months,CPSC continuedto meetwith the CCAC and City staffto
strategize ways for CPSC to reduce its costs while continuing to provide high.quality infant
and preschool care in Palo Alto. Although CPSC worke~l to identify Ways to decrease its
operating costs, it became clear that the amount of rent it paid tO th.,e City under the City’s
rent structure at Cubberley (nonprofit$.79/sq.ft) was quickly becoming unaffordable, given
decreasing subsidy fi’om Roche.. As City staff worked with CPSC to identify .potential
solutions to CPSC’S financial challenges, the goal of keeping CPSC.within Palo Alto’s city
limits remained.an important one. The high co’st of providing quality child care tO infants
and preschoolers is reflected in CPSC’s 1997 budget’(Attachment C), Which ~dieates that
CMR:233:98 ’
Page 2 of 4
almost 80 percent of cPSC’s total operating budget funds employees’ salaries and. expenses.
Services and supplies account for another 12 percent of CPSC’s operating budget; the
remaining 8 percent covers rent and leases.
When Syntex was acquired by Roche in 1994, it greatly reduced the subsidy of the center’s
operations. Where Syntex contributed $300,000 or 20% of the center’s operating expenses,
plus approximately $50,000 in in-kind services, Roche has decreased the operating subsidy
to $165,000 in 1998 with much fewer in-kind services. In addition to adjusting to Roehe’s
decreasing operating subsidy, CPSC has also had to absorb the cost of these in-kind services
which include: computer support, facility repairs, grounds maintenance, accounting,
auditing, budgeting support, payroll, banking, telephone, and printing.
As CPSC adjusts to the reduction in Roche’s subsidy in 1998, without a reduction in its
rental rates CPSC will.be faced with the choice of either reducing its staffing levels or
moving out of Palo Alto.. Reducing staffing levels would have a dramatic effect on the
quality of care currently provided by CPSC, as this measure would result in a higher staff
to child ratio, despite research that indicates that ~taff to child ratio is one of the most
important quality indicators in ekild care. Given CPSC’s demonstrated commitment to
providing .high quality, child care,.CPSC has already indicated that faced with such a choice,
CPSC would choose to relocate rather than reduce its quality of service..
The discussion between.CPSC, CCAC, and stafflead to a recommendation by staff regarding
the formation of a partnership between-CPSC and PACCC. Staff felt,this would .provide the
¯ two organizations opportunities to combine certain resources.and possibly reduce CPSC’s
expenses. for financial and administrative services performed in the-two organizations.
CPSC and staffhave developed a number of milestones that would lead:to the formation of
a parmership (Attachment D)..
The. Board of Directors for CPSC and PACCC have been discussing.the possibilities of a
CPSC/PACCC partnership, in an effort to reduce costs for CPSC and to improve ~he
provision of child care services in the community..While these discussions are under way,
staff is proposing a temporary reduction:in rent to allow CPSC to Continue to provide high
quality child care in Palo Alto. As indicated in Attachment D, CPSC has agreed to reach
a decision regarding the formation of a partnership with PACCC by December 3 !~ 1998;
accordingly, staff recommends a rent reduction through December 1998 of. $31,.140.
Provided CPSC and PACCC agree to form a partnership, staff will return to Correct-in
December 1998 and would propose the continuation of the reduction through. June 1999.
This will allowtime for CPSC and PACCC to complete the implementation of the
partnership.
RESOURCE IMPACT "
The impact of the rent reduction to the City’s General Fund for.Fiscal Year 1998-99 would
be $31,140. If CPSC and PACCC agree to form a partnership by December 1998, staff
would return with a Budget Amendment Ordinance for $31,140for the continuatiofl of the ¯
CMR:233:98
reduced rent through the: end of Fiscal Year 1998-99.. As a result of the .partnership
discussion, should CPSC andPACCC agree that CPSC would become a PACCC center, staff
would propose that CPSC would pay no rent to the City for the use of its space at the
Cubberley Community Center. This would .be consistent with. the City’s practice of not
charging rent a~ part of the City subsidy to PACCC for its child care centers, that are located
on City property,.
POLICY IMPLICATIONS ..
The Council-approved nonprofit rental rate of $.79/sq.ft for leased space at Cubberley
¯ Community Center is reflected in the Municipal Fee Schedule for Fiscal Year 1997-98. The
proposed¯ temporary reduction in the rental rate for CPSC would r~present an exception to
City policy for nonprofit rental rates at Cubberley. Moreover, it may result in other requests
from tenants for reductions in rental rates. However, the proposed temporary reduction .in
CPSC’s rental rate at Cubberley is consistent with the .City’s Child Care Advisory
Committee’s (CCAC) mission to "maintain ~adequate supply of quality child care services
in Palo Alto." Staffand the CCAC believe that a temporary reduction in. CPSC’s rental rate
.will achieve the desired outcome of retaining quality child care services,, particularly infant
care, in Palo Alto.
ENVIRONMENTAL REVIEW "
This program is. not a project as defined, by the California Environmental Quality Act and is
not subject to CEQA requirements.. ;
ATTACHMENTS :.-
Attachment A:
Attachment B:
Attachment C:
Attachment.D:
¯ Amendment No. 2 to The Children’s Preschool CenterSublease
¯ Non-Profit Child Care Rents in Palo Alto, April-1997.
CPSC Financial Information
CPSC Milestones for Formation of Partnership with PAC~C
PREPARED BY~Ilene Hei’tz, Manager ?~:f.. Child Care & Family Services ....
DEPARTMENT HEAD
PAUL TItILTGEN
Director of Community Services.
Page4.of4"CMR:233:98- : ....................................
CITY MANAGER APPROVAL:. ~IQ,E~
C~ Manager
Non-Profit Child Care Rents
April, .1997
PACCC Centers*
Ventura
Neighborhood Infant/Toddler
Infant/Toddler Center
Sojourner Truth
College Terrace
Downtown Children’s Center
S/month
$0
$600
$450
$0
$0
$735
in Palo Alto.
Children S/child/month
73
12
24
73
35
24
$0
$50-
$19
$o
$o
$31
Stanford Centers*
Children’s Center of Stanford
Stanford Arboretum
Other
Whistle Stop (Veteran’s Hospital)"
Mini Infant Center* (PACCC Affiliate)
The Learning Center*
YWCA on Alma"
Covenant* "
Ta ’Enpa
Palo Alto .Friends.
Parent’s Nursery School
Heffalump
Country.Day
Ellen Thacher
Grace Lutheran
CLc~’b --~.Buttons ’N .Bows
First Congregational Church
CPSC with Non-Profit rate*
.$o
$o
$1
=~25
$1,100
$0
$0
$0
$0
$o
$350
$1,000
$500
$300
$2,442
$75O
150
150
96
12
35
i32
135
8O
24
27
24
42
,43
Average
$0
$0
$69
$31
$0
$0
¯$15
$21
$19
$13
$56
.$17
$7,105 150 $47
* Provides infant care.
**This is a drop-in progi’am for YWCA class participants.. The number of children vades.
CPSC Financials
¯ 1997 Budget
Stem
Income
Tuition
.Corporate Subsidies
Total Income
~ses
Facilitie.s, leases
Services
~ & Other
~ellSeS
Polo Alto
$1,370,000
$185,000
$1,555,000
$125
-$1
$0
Evergreen
$254,000
$141,000
$395,0O0
$362
$0
$17,000
$16,000
$395,000
Attachment C
Item ¯
1998 Budget
Income
Tuition
Polo Alto
)orate Subsidies $165Interest$10istrations$4TOtal ¯Income $1
)enses $1
Facilities leases $84Services-$177
)lies & Other " "" $82
Total Ex $I
reen-
$37
$o
¯ $283
$i29
$0
$0
$412
$
$412
$0
The finances of" the Palo Alto and Evergreen centers are sepa~rate,
Attachment D
CPSC Milestones for Formation of Partnership with PACCC
Date
December i997
July 1998-..
December 1998
January 1999-
Deeember1999
July, 1999-
December 1999
Deeember~ 1999-
June 2000
Milestones
CPSC and-PACCC.Board Committees.formed to explore
paJ’tnership and monthly meetings schedule
Partnership plan agreed upon by Partnership Committee and
transition plan developed
CPSC andPACCC will have completed communicating with
¯ their own memberships to develop consensus on the benefits of
the partnership.
-Begin phased.implementation ofparm~rship "
Complete implementation ofpartn, ership
Attachment C
City of Palo Alto
City Manager’s Report
TO:.HONORABLE CITY COUNCIL
FROM:
DATE:
CITY MANAGER
FEBRUARY 22, 19~
DEPARTMENT: COMMUNITY SERVICES
CMR: 124:99
SUBJECT:TEMPORARY RENTAL ASSISTANCE FOR THE CHILDREN’S
PRESCHOOL CENTER (CPSC) LOCATED AT THE CUBBERLEY
COMUNITY CENTER-
REPORT IN BRIEF
This report recommends, based on the status of the formation of a partnership between by
The Children’s Preschool Center (CPSC) ~nd Palo Alto Community Child Care (PACCC),
that Council approve the continuation of the rental assistance to CPSC in.the amount of
$31,140 for the second six months of Fiscal Year 1998-99; and 2) authorize the Mayor to
execute an amendment to the City’s sublease with CPSC to provide such a temporary rent
reduction(Attachment A). At the May 12, 1998 city Council meeting, Council approved
a temporary reduction in the 1998-99 rental rates charged to CPSC, a private nonprofit child
care center located at the Cubberley Community Center (CMR: 233~98), in order to give
CPSC sufficient time to explore a partnership arrangement with PACCC that would result
in shared resources and reduced administrative expenses for CPSC. The rental assistance,
totaling $62,280 during Fiscal Year 1998-99, was to be dependent upon CPSC and PACCC
achieving .certain milestones toward the development of a partnership between the two
organizations. Council approved staff’s recommendation that as a condition for CPSC to
receive the first half ($31,140) of the proposed rental assistance, CPSC would have to
demonstrate.by December 1998 that it had agreed to move forward with a plan to develop
a partnership with PACCC. Staff was directed to return with recommendation for the
continuation of the reduced rent through the end of Fiscal Year 1998-99, provided that
CPSC and PACCC agreed to form a partnership by December 1998. Accordingly, this report
provides information on progress made by CPSC and PACCC toward the development of
such a partnership.
CMR: 124:99 Page I of 3
RECOMMENDATION
Staff recommends that the Council approve rental assistance to the Children’s Preschool
Center in the amount of $31,140 for the period January 1, 1999 to June 39, 1999; and 2)
authorize the Mayor to execute an amendment to the City’s sublease with The Children’s
Preschool Center to provide such a temporary rent reduction (Attachment A).
BACKGROUND
Over the past several years, CPSC has been adjusting to reductions in its operating budget
as the result of a steadily ~lecreasing subsidy provided by its parent company, Roche
Bioscience. To preserve the quality of child care services provided by CPSC, which is
largely dependent on a high staff-to-child ratio, CPSC must reduce its operating expenses in
areas other than staffing. During the past year, PACCC and CPSC staff and Board members
have been discussing ways to integrate their agencies to maximize operating efficiencies and
reduce CPSC’s administrative costs.
DISCUSSION
On December 10, 1998, the boards of directors of PACCC and CPSC met to discuss
partnering. After that meeting, each board took action on the issue of partnership. The result
of this action was thatthe PACCC and CPSC boards of directors decided to proceed with a
partnership. There is great enthusiasm among the board members and both executive
directors for this partnership, which would initially begin by integrating the fund
development, outreach, and corporat~ support fimctions of the two orgahizations. Combining
the resources of these two leading child care.agencies in Palo Alto. has the potential to attract
financial support fi~om outside sources, including the corporate community, given that
currently CPSC and PACCC combined provide 25 percent of the licensed center-based infant
child care in Palo Alto.
The partnership is expected to evolve over an eighteen-month period according to a
CPSC/PACCC Partnership Transition Plan. It is anticipated that, by June 2000, the
partnership between the two organizations will be fully implemented.
Staff believes that significant progress has been made toward the development and
implementation of a partnership between CPSC and PACCC, which will reduce certain
operating expenses, for CPSC and enable the two agencies tO pool their resources.
Accordingly, staff recommends a continuation of the rent reduction through the remainder
of Fiscal Year 1998-1999. Staff believes that this reduction in CPSC’s rental rate has
achieved the. desired outcome of retaining quality child care services, particularly infant care
in Palo Alto, while CPSC continues to explore ways to reduce its operating expenses.
RESOURCE IMPACT
Approval of the attached amendment to the City’s sublease with CPSC to provide the
-continued rent reduction will result in a decrease in revenues of $31,140. This is a one-time
loss of revenue. Since revenues are not appropriated in the same manner as expenditures, no
CMR: 124:99 Page 2 of 3 ~
Budget Amendment Ordinance is required at this time.
pOLICY IMPLICATIONS
The proposed temporary reduction in the rental rate for CPSC would represent an exception
to City policy for nonprofit rental rates at Cubberley. However, the proposed temporary
reduction in CPSC’s rental rate is consistent with the City’s Child Care Advisory
Committee’s (CCAC) mission to maintain an adequate supply of quality child care services
in Palo Alto.
wi CmONMWrCrA
This program is not a project as defined by the California Environmental Quality Act and is
not subject to CEQA requirements.
ATTACHMENTS
Attachment A:
Attachment B:
Amendment No. 3
CMR:233:98
PREPARED BY: Ilene Hertz, Manager of Child Care & Family Services
DEPARTMENT HEAD REVIEW. ~ ~
PAUL THILTGEN
Director of Community Services
EM~SON
Assistant City Manager
CMR: 124:99 Page 3 of 3
Attachment A
AMENDMENT NO. 3
TO THE CHILDREN’S PRE-SCHOOL CENTER, INC., SUBLEASE
THIS AMENDMENT NO, 3 ("Amendment 3") is made and entered into this day of
1999, by and between the City of Palo Alto, a municipal corporation, (CITY)
and The Children’s Pre-School Center, Inc., a California corporation (SUBTENANT.).
RECITALS
Ao
ao ¯
Do
Eo
On September .1, 1989, the City of Palo Alto and Palo Alto Unified. School District
(PAUSD) entered into a Lease and Covenant Not to Develop (Lease) of the former
Cubberley High School site at 4000 Middlefield Road (Cubberley Site) for the purpose
of developing the site into a community facility and subleasing a portion of it for
educational services and child day care services.
On May 1, 1997, CITY AND SUBTENANT entered into a (5) five year sublease (the
Sublease) for a portion of the former Cubberley High School site at 4000 Middlefield
Road, Palo Alto, California, to provide for their continued use of approximately 8,772
square feet of building and adjoining ground space for providin,.g child cam services.
On July 11, 1997, CITY AND SUBTENANT amended the Sublease.to provide for a
reduction in rent to.the nonprofit.rental, rate based upon Subtenant’s obtaining
non profit status.
On June 25, 1998, City and SUBTENANT amended the Sublease to provide for a
temporary six month reduction in rent while Subtenantdeveloped a partnership with
Palo Alto Community child Care (PACCC).
SUBTENANT" has madeprogress in developing a partnership with PACCC, and CITY
AND SUBTENANT now desire to amend the Sublease to provide for an additional six
month reduction in rent while Subtenant further implements a partnership with
PACCC.
Fo NOW THEREFORE, in consideration of the following covenants, terms, and
conditions, the parties hereto agree.
Section 1.Paragraph V (CONSIDERATION/RENT) of the Sublease is hereby amended
to include the following:
Effective January 1, 1999 through June 30, 1999, SUBTENANT shall pay to
CITY one thousand nine hundrecl and thirty seven dollars ($1,937.00) per
month due and payable in accordance with Clause VIII (RENT PAYMENT
PROCEDURE). Beginning July 1, 1999, the rentshall revert to the
previously established rent of Six Thousand Nine Hundred Thirty Dollars
($6,930.00) per month.
Section 2.All provisions of the Sublease and Amendment 1 not amended herein, shall
remain in ful! force and effect.
IN WITNESS WHEREOF, the parties have executed this AMENDMENT the day and year
first above written.
CITY:
CITY OF PALO ALTO (CITY)
SUBTENANT:
BY: BY:
Mayor
ATTEST:
BY:
City Clerk
APPROVED AS TO FORM:
By:
Sr. Assistant City Attorney ..
RECOMMENDED FOR APPROVAL:
By:
Manager, Real Property-
By:
Director, community Services ¯
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