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HomeMy WebLinkAbout2.c. Reimbursement and Assignment Agreement – Rosemount Area Hockey Association EXECUTIVE SUMMARY City Council Work Session: May 1, 2018 AGENDA ITEM: Reimbursement and Assignment Agreement – Rosemount Area Hockey Association AGENDA SECTION: Discussion PREPARED BY: Dan Schultz, Parks and Recreation Director AGENDA NO. 2.c. ATTACHMENTS: Proposed Reimbursement and Assignment Agreement APPROVED BY: LJM RECOMMENDED ACTION: None, discussion only. ISSUE At the February 5, 2018 City Council regular meeting, the Council approved a 10 Year Joint Powers Agreement with the City of Inver Grove Heights that would have the City of Rosemount and the Rosemount Area Hockey Association (RAHA) paying for improvements on the Inver Grove Heights Community Center (IGHCC) west rink in return for having access to additional prime ice on the west rink at the IGHCC. The next step in moving this project forward is to approve a 10 Year Reimbursement and Assignment Agreement with the RAHA. The City Attorney has drafted the attached agreement and it has been shared with RAHA. They will consider this agreement at their board meeting on Wednesday, May 2. Staff would suggest that the City Council take formal action on this agreement on Tuesday, May 15. The Inver Grove Heights West Rink Improvement project is currently out for bid by the City of Inver Grove Heights. The bids will be opened on May 1, 2018. BACKGROUND Following the failed referendum in 2016 that included a new indoor ice rink, Rosemount Parks and Recreation Department staff were contacted by staff from the City of Inver Grove Heights about an opportunity for RAHA to secure additional ice at the Inver Grove Heights Community Center (IGHCC). At the time, both rinks at the IGHCC were in need of major repairs. The east rink’s repairs were needed immediately and were completed in the summer of 2017. The repairs for the west rink are expected to be required in the next year or two. For several months, Rosemount City staff has been talking with staff from the City of Inver Grove Heights regarding an opportunity for the Rosemount Area Hockey Association (RAHA) to get more ice time at the Inver Grove Heights Community Center (IGHCC). RAHA currently uses approximately 200 – 225 hours of ice at the IGHCC. Inver Grove Heights is offering a chance for RAHA to get a total of 550 peak hours of ice at the IGHCC from November 1 through February 28 on an annual basis. In return for getting the additional ice at IGHCC, the City of Inver Grove Heights is asking both the City of Rosemount and RAHA to help pay for repairs to their west rink. The proposed west rink improvement project would include a new rink floor, supply header, electrical, dasher board improvements, and a new ice resurfacer, design fees and contingency. The engineer’s estimate to make the necessary repairs to the west rink at the IGHCC is approximately $1,011,000. Based on what the City of Inver Grove Heights paid for the improvements to the east rink, staff is expecting the cost to be lower and hopefully closer to $860,000. The cost would be split between the City of Inver Grove Heights and the City of Rosemount, with RAHA reimbursing the City of Rosemount one half of the portion that the City of Rosemount will be responsible for and paid over ten years. The City of Rosemount and RAHA would not be responsible for any additional operating costs or capital improvements to the IGHCC. Staff has met with the RAHA Board on several occasions this past year and they have voted in favor of moving forward to support this partnership. SUMMARY This item is on the agenda as an update for the City Council and an opportunity for the City Council to review the Reimbursement and Assignment Agreement prior the City Council meeting on May 15. 516920v1 DTA RS215-7 1 REIMBURSEMENT AND ASSIGNMENT AGREEMENT THIS REIMBURSEMENT AND ASSIGNMENT AGREEMENT (the “Agreement”) is entered into this ___ day of ______________, 2018 by and between the city of Rosemount, a municipal corporation under the laws of Minnesota (“Rosemount”), and the Rosemount Area Hockey Association, a nonprofit corporation under the laws of Minnesota (“RAHA”). Rosemount and RAHA may hereinafter be referred to individually as a “Party” or, together, the “Parties.” RECITALS WHEREAS, the city of Inver Grove Heights (“IGH”) operates the Inver Grove Heights Veteran’s Memorial Community Center (“IGHCC”), which contains two ice rinks, the “East Ice Rink” and the “West Ice Rink”; and WHEREAS, the two rinks at IGHCC are capable of not only supporting the ice recreational programs of IGH, but also partially supporting the ice recreational programs of Rosemount, including RAHA; and WHEREAS, the West Ice Rink at IGHCC is in need of major renovations in order to sustain the ongoing ice time needs of the surrounding community; and WHEREAS, said renovations are scheduled to begin in 2018 and are to include, without limitation, a new rink floor, dasher board improvements, and a new ice resurface vehicle (the “West Ice Rink Improvement Project”); and WHEREAS, Rosemount recently entered into a joint powers agreement with IGH for the purpose of jointly facilitating and funding the West Ice Rink Improvement Project, a copy of which is attached hereto as Exhibit A (the “JPA”); and WHEREAS, although the West Ice Rink Improvement Project will be managed primarily by IGH, Rosemount has agreed to pay for 69% of the costs associated with the West Ice Rink Improvement Project, plus interest at a rate of 6.326%, over a 10-year period; and WHEREAS, the JPA further guarantees Rosemount the ability to purchase 550 hours of peak ice time at IGHCC per year during the 10-year payment period (the “Ice Time”). “Peak ice time” is defined in the JPA as ice time between November 1 and February 28, Monday through Friday from 5:00 pm to 10:00 pm, and Saturdays and Sundays from 7:00 am to 10:00 pm; and WHEREAS, Rosemount is authorized under the JPA to assign its right to purchase the Ice Time to a Rosemount area ice recreational provider such as RAHA; and WHEREAS, RAHA is in need of additional peak ice time for its members and events and, accordingly, is willing to share with Rosemount the costs associated with the West Ice Rink Improvement Project in exchange for the exclusive right to purchase the Ice Time from IGH over the next 10 years; and 516920v1 DTA RS215-7 2 WHEREAS, the Parties desire to enter into this Agreement in order to establish a 10-year cost-sharing relationship, whereby each Party will pay for one-half (50%) of Rosemount’s total financial obligation for the West Ice Rink Improvement Project, as outlined in the JPA; and WHEREAS, the Parties acknowledge that absent this Agreement and RAHA’s financial contributions contemplated hereunder, Rosemount would choose not to fund the West Ice Rink Improvement Project, thereby negatively impacting RAHA’s ability to secure ice time for its members and events; and WHEREAS, the Parties wish to specify in this Agreement their respective responsibilities for the costs associated with the West Ice Rink Improvement Project, along with the assignment of Rosemount’s rights to the Ice Time to RAHA. NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, Rosemount and RAHA hereby agree as follows: AGREEMENT 1. Incorporation of Recitals and Exhibits. The Recitals set forth above and the exhibit attached to this Agreement are incorporated into this Agreement as if fully set forth herein. 2. Reimbursement. RAHA hereby agrees to reimburse Rosemount for one-half (50%) of the actual and verifiable costs incurred by Rosemount, including interest, under the JPA for the West Ice Rink Improvement Project. Because Rosemount is responsible for 69% plus interest of the total cost of the West Ice Rink Improvement Project, RAHA agrees and acknowledges that pursuant to this Agreement, RAHA is therefore responsible for 34.5% of the total cost of the West Ice Rink Improvement Project, including interest, irrespective of any estimated project costs. Such amounts shall be paid to Rosemount pursuant to the payment process outlined in section 3 of this Agreement. 3. Payments. In accordance with the JPA, Rosemount is required to make 10 equal payments to IGH over the course of 10 years. Following each of those individual payments by Rosemount to IGH, Rosemount shall provide RAHA with an invoice for one-half (50%) of the amount paid by Rosemount to IGH. Following receipt of said invoice, RAHA shall reimburse Rosemount for the amount invoiced no later than thirty (30) days after receipt thereof. Should RAHA fail to make timely payments in accordance with this Agreement, interest shall accrue on the past-due amount at an annual rate of 6.326%. Additionally, Rosemount reserves the right to unilaterally revoke its assignment of rights outlined in section 4 of this Agreement in the event that RAHA fails to pay any invoice within 30 days of receipt; provided, however, that Rosemount first provides 14 days’ written notice to RAHA of its intent to exercise this right and RAHA does not pay its past-due invoice within said 14 days. 516920v1 DTA RS215-7 3 4. Assignment. Rosemount hereby assigns to RAHA its Ice Time pursuant to section 5.03(d) of the JPA. Pursuant to this assignment, RAHA shall have the exclusive ability to purchase the Ice Time from IGH in accordance with all terms and conditions provided in Article 5 of the JPA. By entering into this assignment, the Parties acknowledge and agree that all of Rosemount’s obligations contained in Article 5 of the JPA shall hereinafter become the sole obligations of RAHA. 5. Additional RAHA Responsibilities. In exercising its rights under the assignment provisions contained herein, RAHA further agrees to the following: a. Reservation Obligation. RAHA is hereby obligated to annually reserve 550 hours of peak ice time at the IGHCC during the entire term of this Agreement. b. Communications with IGH. RAHA shall directly communicate with IGH and coordinate the scheduling of Ice Time annually with IGH in accordance with procedural steps contained in section 5.03 of the JPA. Prior to September 15th of each year, RAHA shall ensure that IGH has appropriate contact information for RAHA in order to provide RAHA with its peak ice time schedule on or before that date. Rosemount shall not be required to facilitate any aspect of said scheduling. c. Ice Time Reservation. On or before September 30th of each year, RAHA shall review and use the schedule of peak ice time availability provided by IGH, work directly with IGH city staff, and provide IGH with RAHA’s desired schedule of 550 hours of peak ice time reservations. d. Ice Time Payments. After the peak ice time hours are annually reserved by RAHA, the obligation to pay for the ice time arises and RAHA must pay for reserved ice time, whether used or not, in accordance with section 5.02 of the JPA. Rosemount shall not be responsible for paying IGH for any of the ice time reserved by RAHA, as required under this Agreement. e. Ice Time Compliance. While using the IGHCC for its events and activities, RAHA shall comply with any and all use regulations pertaining to the IGHCC. 6. No Advertising, Concessions, Storage. RAHA acknowledges and agrees that this Agreement does not allow or authorize RAHA to sell advertising or concessions within the IGHCC, nor does it provide RAHA or its members with any storage areas or storage rooms at the IGHCC other than the temporary use of changing rooms by ice skaters during reserved ice times. 7. Term. The term of this Agreement shall commence on the date first written above and shall terminate upon both of the following events occurring: a) RAHA’s completion of the 10 years of reimbursement payments to Rosemount for one-half (50%) of Rosemount’s funding of the West Ice Rink Improvement Project Costs; and, b) the expiration of the 10 years of availability of the Ice Time. 516920v1 DTA RS215-7 4 8. Indemnification. RAHA agrees to indemnify, hold harmless, and defend Rosemount, its officials, employees, contractors, and agents from and against any and all liability, loss, costs, damages, expenses, claims, actions, or judgments, including reasonable attorneys’ fees which it, or its agents or contractors may hereinafter sustain, incur, or be required to pay, arising out of or by reason of RAHA’s performance or non-performance of its obligations under this Agreement. 9. Data Practices. Data provided, produced, or obtained under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. RAHA will immediately report to Rosemount any requests from third parties for information relating to this Agreement. RAHA agrees to promptly respond to inquiries from Rosemount concerning data requests. RAHA agrees to defend and indemnify Rosemount from any claim, liability, damage or loss asserted against Rosemount as a result of RAHA’s failure to comply with the requirements of this paragraph; provided that RAHA shall have no duty to defend or indemnify where RAHA has acted in conformance with Rosemount’s written directions. 10. Audits. RAHA must allow Rosemount, or its duly authorized agents, and the state auditor or legislative auditor reasonable access to RAHA’s books, records, documents, and accounting procedures and practices that are pertinent to all payments made under this Agreement for a minimum of six years from the termination of this Agreement. 11. Notices. Any notices permitted or required by this Agreement shall be deemed given when personally delivered or upon deposit in the United States mail, first class and postage fully prepaid, and addressed to: Rosemount: The City of Rosemount 2875 145th Street W Rosemount, MN 55068 Attn: City Administrator RAHA: Rosemount Area Hockey Association PO Box 225 Rosemount, MN 55068 Attn: President Or such other address as either party may provide to the other by notice given in accordance with this provision. 12. Governing Law. The execution, interpretation, and performance of this Agreement will, in all respects, be controlled and governed by the laws of Minnesota. 13. No Remedy Exclusive. No remedy herein conferred upon or reserved to a non-breaching party shall be exclusive of any other available remedy or remedies, but each and every 516920v1 DTA RS215-7 5 such remedy shall be cumulative and shall be in addition to every other remedy given under the Agreement or now or hereafter existing at law or in equity or by statute. 14. Severability. The provisions of this Agreement are severable. If any portion of this Agreement is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision will not affect the remaining provisions of the Agreement. 15. Complete Agreement. This Agreement contains the complete agreement between the Parties and supersedes any previous oral agreements, representations and negotiations between the Parties regarding the subject matters of this Agreement. 16. Waivers. By entering into this Agreement, Rosemount does not waive its entitlement to any immunities under statute or common law. Any waiver by either party of a breach of any provision of this Agreement will not affect, in any respect, the validity of the remainder of this Agreement. 17. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original but all of which taken together shall be deemed a single instrument. 18. Non-Assignability. Neither Party shall assign an interest in this Agreement, nor shall transfer any interest in the same, without the other Party’s written consent. 19. Modification. No modifications or amendments may be made to this Agreement unless in writing and signed by the Parties hereto. 20. Headings. The headings contained in this Agreement have been inserted for convenience of reference only and shall in no way define, limit, or affect the scope and intent of this Agreement. [remainder of page left intentionally blank] 516920v2 DTA RS215-7 6 CITY OF ROSEMOUNT By: William Droste, Mayor By: Jeff May, Deputy City Clerk ROSEMOUNT AREA HOCKEY ASSOCIATION, INC. By: Its: A-1 EXHIBIT A The JPA [TO BE INSERTED]