For City Council Meeting May 28, 2024
TO: Honorable Mayor and City Council
APPROVAL: G. Michael Milhiser, Interim City Manager
FROM: Tim Sullivan, Director of Maintenance and Facilities
Title
Request City Council to 1) Approve a Sixth Amendment to the Lease Agreement with the County of San Bernardino for the Library located at 251 West First Street and 2) Authorize the City Manager or their Designee to Execute all Related Documents.
Body
RECOMMENDATION
Staff requests that the City Council:
1. Approve the Sixth Amendment to the Lease Agreement; and,
2. Authorize the City Manager or their Designee to Execute all Related Documents.
BACKGROUND
The County of San Bernardino (“County”) currently leases and operates a public library in a 12,400-square-foot City-owned building at 251 West First Street. The County’s lease commenced on May 1, 2005, and had an initial term of five (5) years, with one (1) three (3) year and two (2) one (1) year options to extend (“Lease Agreement”). A copy of the Lease Agreement is included as Attachment 1.
On May 28, 2010, the County exercised the three (3) year option via the First Amendment to the Lease Agreement, extending the term to April 30, 2013. Subsequently, the County exercised the two (2) one (1) year options, which ultimately expired on April 30, 2015.
On March 12, 2013, the City Council approved the Second Amendment to the Lease Agreement, which granted the County two (2) additional three (3) year options extending the lease from May 1, 2015 through April 30, 2021.
On April 28, 2015, the City Council approved the Third Amendment to allow the County to exercise its first three (3) year option, extending the Lease Agreement from May 1, 2015, to June 30, 2018.
On August 28, 2018, the City Council approved the Fourth Amendment to allow the County to exercise its second three-year option, extending the Lease Agreement from July 1, 2018, to October 31, 2021.
On September 14, 2021, the City Council approved the Fifth Amendment to allow the County to extend the term four (4) years, extending the Lease Agreement from November 1, 2021, to October 31, 2025.
ANALYSIS/DISCUSSION
The County has requested that the City continue to lease its facility to the County to continue its operations as a public library. Included herewith is the Sixth Amendment to the Lease Agreement that will incorporate the following changes to the Lease Agreement:
• Extend the term five (5) years from November 1, 2025, through October 31, 2030.
• Issues a one-time payment of $124,000 for the Rialto Library Atrium Conversion, City Project, 230203.
• Increase the rent from $6,450 per month (FY 24/25) to $6,579 (FY 25/26) per month with a 2% annual increase thereafter.
• Revises Paragraph 5, “Option to Extend Term” of the Lease on the same provisions and conditions, except for the monthly rent, for two (2) five-year periods following the expiration of the current term.
The Sixth Amendment to the Lease Agreement is included as Attachment 2.
ENVIRONMENTAL IMPACT
The action proposed is not a project under the California Environmental Quality Act (CEQA). The proposed action to approve the lease amendment is an administrative or fiscal action by the legislative body and will not result in any changes to the environment.
GENERAL PLAN CONSISTENCY
This action is consistent with Guiding Principle 3A in the General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
The City of Rialto has identified several goals and objectives within the City’s recently adopted General Plan through which the City looks to improve the community. The proposed action to approve the lease amendment is consistent with the following goals and objectives contained in the General Plan:
Goal 3-11: Provide community facilities that adequately support established programs, can accommodate future needs, and are accessible to all members of the community.
Goal 3-13: Provide high-quality library resources to meet the educational, cultural, and lifelong learning needs of all residents.
Policy 3-13.1: Continue the innovative partnership with the San Bernardino County Library and Friends of the Rialto Library to improve the quality of library services in Rialto.
Policy 3-13.2 Coordinate with San Bernardino County to develop programs and services that meet future needs of adults, children, and new readers.
LEGAL REVIEW
The City Attorney’s Office has reviewed the Sixth Amendment to the Lease Agreement and approved it as to form.
FINANCIAL IMPACT
Operating Budget Impact
Revenues from this lease will be deposited into the General Fund Account No. 10107402-40001.
• FY 2025/2026 - $6,579 per month ($78,948)
• FY 2026/2027 - $6,711 per month ($80,532)
• FY 2027/2028 - $6,845 per month ($82,140)
• FY 2028/2029 - $6,982 per month ($83,784)
• FY 2029/2030 - $7,121 per month ($85,452)
Capital Improvement Budget Impact
The Lease Agreement in Section 12 requires the City to provide maintenance or repairs as necessary and requires the City and County to negotiate any major capital improvement costs.
The City will receive a one-time payment of $124,000 to cover expenses related to Rialto Library Atrium Conversion, City Project No. 230203. The corresponding revenues and expenditures have been budgeted in the Fiscal Year 2024/2025 budget in the Capital Projects Fund 223.
Licensing
This action does not require the application of a business license or payment of a Business License tax.