Staff Report – City Council to Provide Staff Direction for the Livingston Senior Citizens Center Lease Renewal

Note: This document was produced by taking a scanned image of the original document and running it through a program that “translates” image into text. So, sorry if there are any Goofs, Gaffs, Glitches and/or other Textual Gremlins.

STAFF REPORT

AGENDA ITEM: City Council to Provide Staff Direction for the Livingston Senior Citizens
Center Lease Renewal.

MEETING DATE: April 19, 2011

PREPARED BY: Jasmin Bains, Senior Accountant

REVIEWED BY: Victoria Lewis, Interim City Manager

RECOMMENDATION:

City Council to provide staff direction for the Livingston Senior Citizens Center lease renewal.

BACKGROUND:

On June 30, 2000, the Merced County Community Action Agency Board ("Merced County") entered into a lease agreement with the City of Livingston agreeing to lease the previously known Livingston Recreation Center at 633 Main Street. Merced County used the building for the Cherish Program. In May 2007, the Livingston Recreation Center was transformed into the present City Council Chambers and the Cherish Program was moved to the new Senior Citizens Center at 420 Main Street. In order to provide this building to Merced County, the City of Livingston entered into a lease agreement with the Sapien Family Trust, agreeing to lease the building from the Trust for four (4) years.

DISCUSSION:

The lease agreement between the City of Livingston and the Sapien Family Trust in the amount of $1,000 per month is up for renewal in June, 2011, and a 60-days notice is required if the City wishes to terminate the lease. The City has on option to renew the lease for an additional three (3) years. The lease with the Sapien Family Trust states that if the City decides to exercise the 3 year option the rent will increase by an amount equal to the Consumer Price Index ("CPI") not to increase less than 3% nor greater than 5% at the commencement of each applicable year (Section

3.1). During the first year the lease amount could increase from $1,000 per month to a range of $1,030 to $1,050 based on the minimum and maximum percentage increases of 3% and 5%. Based on the correspondences received from Merced County they are unable to augment the County’s contribution towards this service, this would result in the City contributing the amount of the annual increases in addition to the $600 per month.

Also, the lease agreement for which the City receives $400 per month in rent from Merced County requires the City to provide a 30-days notice prior to the end of the yearly term (July 1St) in order to terminate the agreement.

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FISCAL IMPACT:

The City currently pays monthly rent of $ 1,000 to the Sapien Family Trust and receives $400 per month from the Merced County Community Action Agency Board for use of the Senior Citizens Center building for the Cherish Program.

ATTACHMENTS:

Agreement between the City of Livingston and the Merced County Community Action Agency Board. Agreement between the City of Livingston and the Sapien Family Trust.

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