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Item 5DCity of Southlake, Texas MEMORANDUM TO: Billy Campbell, City Manager FROM: Sharen Elam, Director of Finance Ext. 1713 SUBJECT: Approve Interlocal Agreement with Tarrant County for Town Hall Action Requested: Approval of attached Interlocal Agreement with Tarrant County ( "the Agreement'). Background Information: This agreement outlines the specific details as to usage, and operation of the Town Hall government building. Listed below are the significant items of the agreement: • Joint ownership -the property shall be divided between the municipalities so that the City owns 75% and the County owns 25% of the fee simple interest. In the event that either party determines to sell the property, the other party shall have the right of first refusal to purchase the interest, at fair market value as determined by an appraisal. • Allocation of space -both municipalities may use the common areas. The City is entitled to use approximately 75% of the area of the building for its occupancy. The County is entitled to use approximately 25% of the area of the Building for its occupancy. This allocation is consistent with the current space allocation (use). • Allocation of cost -the costs of operation and capital expenses of the Property in the same proportion as they share ownership (75/25). Both municipalities agree that except for emergency expenditures, expenditures for capital expenses in excess of $25,000 shall not be made without approval of the governing bodies of the City and the County. Tarrant County Commissioners are scheduled to vote on this agreement at their August 26 meeting. Financial Considerations: Average annual revenue of $50,000. Citizen Input/ Board Review: None required Billy Campbell, City Manager March 23, 2011 Legal Review: The city attorney prepared this agreement. Alternatives: Modification of agreement or disapproval. Supporting Documents: Interlocal Agreement Staff Recommendation: Approval of the attached Interlocal Agreement Billy Campbell, City Manager March 23, 2011 INTERLOCAL AGREEMENT This Agreement is made and executed between the City of Southlake, Texas, 1400 Main Street, Suite 460, Southlake, Texas 76092, ( "the City ") and Tarrant County, 100 E. Weatherford Street, Fort Worth, Texas 76196 ( "the County "). The City and the County may be referred to collectively as "the Parties." PURPOSE OF THE AGREEMENT The Parties desire to enter into an interlocal agreement pursuant to Chapter 791 of the Texas Government Code for the use and ownership of land and a building constructed on Lot 1, Block 6 of the Southlake Town Square, 1400 Main Street, in the Town Center Addition to the City of Southlake, Tarrant County, Texas. II. DEFINITIONS BUILDING means Town Hall, the Building located on the Property. CAPITAL EXPENSES means the capital expenses of construction of the infrastructure necessary to serve the Property and construction and maintenance of the Town Hall, in accordance with the Phase One of the Financing Plan of the City of Southlake Reinvestment Zone No. One. Capital Expenses include a parking lot which may be constructed, subject to availability of funds. Capital Expenses shall include, but are not limited to the following costs related to the Property: 1. Replacement of HVAC systems; 2. Replacement or substantial repair of the roof; and 3. Replacement of the Elevators. COMMON AREA means entryway, sidewalks, courtrooms, employee break rooms, meeting and conference rooms, restrooms, and designated reception areas located throughout the Property. It shall also include elevators, parking and service areas, and parking areas, if any. The Common Areas are depicted on Exhibit "B," attached hereto and incorporated by reference herein. EMERGENCY EXPENDITURE means an expenditure necessary because of an emergency event or public calamity such as an act of God, or utility break or failure that requires the immediate appropriation of money to preserve Town Hall or the safety of the occupants of Town Hall, or an expenditure necessary because of unforeseen damage to Town Hall machinery or equipment. OPERATING EXPENSES means expenses incurred by the City for the following: 1. Electric, Water and Wastewater, and Gas Utility Services to the Property; 2. Removal of Solid Waste from the Property; 3. Property, General Liability, and Casualty Insurance Premiums for the Property; 4. Maintenance of the Property, including the Common Areas, and keeping the roof, foundation, structural components and the structural portions of exterior walls of Billy Campbell, City Manager March 23, 2011 the Property in good order, condition and repair, maintaining or repairing windows, doors, plate glass or the surfaces of walls but not limited to maintenance and repairs to of the windows, plate glass, doors, heating system, ventilating equipment, air conditioning equipment, electrical and lighting systems, fire protection sprinkler system, elevators, interior and exterior plumbing, the interior of the Property in general, pest control and extermination, downspouts, gutters, paving, care of landscaping and regular mowing of grass, and including the exterior of the Property. This shall include the expenses incurred by the City in contracting or hiring employees to perform these maintenance services; janitorial services; security services; and 5. Any assessment or fee relating to the Property imposed by any government having jurisdiction over the Property other than the City or the County. PROPERTY means the Town Hall building located on Lot 1, Block 6 of the Town Square Addition to the City of Southlake, Tarrant County, at 1400 Main Street Southlake, Texas, including the grounds adjacent thereto, the sidewalks and parking area, as shown on Exhibit "A." III. OWNERSHIP A. JOINT OWNERSHIP. The Parties agree that the ownership of the Property shall be divided between the Parties so that the City owns 75 percent and the County owns 25 percent of the fee simple interest. The Parties agree to execute and record documents necessary to accomplish this division of ownership. The City specifically agrees to execute a special warranty deed for 25 percent of the ownership of the Property to the County. The City agrees to execute a deed substantially in the form set forth in Exhibit "C" attached hereto and incorporated by reference for all purposes. The County agrees to accept and record the deed after execution by the City. The Parties acknowledge that they are also parties to an Agreement entitled "City of Southlake And Tarrant County, Texas Agreement To Participate In The Tax Increment Reinvestment Zone Number One, City of Southlake, Texas." Pursuant to an amendment to that Agreement, the City will purchase a policy of title insurance for the property 25% of the cost of which shall be paid by County. B. RIGHT OF FIRST REFUSAL. In the event that a Party (the "Selling Party ") determines to sell the Property, the other Party shall have the right of first refusal to purchase the interest, at fair market value as determined by an appraisal of the Property to be sold obtained by the Selling Party. For purposes of this right of first refusal, the term "Property" is defined as that portion of the Property which the Selling Party intends to offer for sale. In such event, Selling Party agrees to notify the Other Party of the fair market value of the Property to be sold and the terms and conditions of the sale (the "Notice of Offer "). The other Party shall have the exclusive right, at its option, for a period of thirty (30) days (the "Exercise Period ") from its receipt of the Notice of Offer to notify the Selling Party in writing that the other Party shall purchase the Property intended to be sold upon the terms and conditions and at the price specified in the Notice of Offer. If the Other Party does not give notice to the Selling Party of its exercise of its rights hereunder within the Exercise Period, the other Party's right of first refusal shall automatically terminate. If the other Party exercises such right to purchase by giving written notice to Selling Party at any time within the Exercise Period, the closing Billy Campbell, City Manager March 23, 2011 of the resulting sale and purchase of the Property shall take place upon the terms and conditions of the Notice of Offer. IV. OCCUPATION OF THE PREMISES A. ALLOCATION OF SPACE. The Parties agree both parties may use the Common Areas in accordance with the terms of this Agreement. The City is entitled to use approximately 75 percent of the area of the Building for its occupancy, as shown on the diagram attached hereto, marked Exhibit "B ", and incorporated herein by reference for all purposes. The County is entitled to use approximately 25 percent of the area of the Building for its occupancy, as shown on Exhibit "B." B. UNUSED SPACE. 1. If either Party does not occupy all of its allotted space, the other Party may, with the written consent of the Party entitled to occupy the space, (the "Entitled Party "), occupy and use such space until such time as the Entitled Party decides to occupy it. If a Party occupies any space allotted to the other party, the Entitled Party may recover the occupancy of the space at any time by giving 120 days notice to the other Party of its intent to occupy such space. Upon receipt of such notice, the Party occupying the space agrees to vacate that portion of the premises and restore it to its original condition before the expiration of 120 days. 2. Either Party may allow another entity to occupy its space in accordance with the terms of a written agreement duly authorized and approved by the City, County and the entity who wishes to occupy the space; provided however, such agreement shall not violate the restrictions imposed upon the Property by the Declaration of Covenants, Restrictions and Easements filed of record. C. COURTROOM. The Parties agree that the City Municipal Court and the County Justice Court shall share the use of the courtroom in the Building equally. The Parties agree to establish a committee to establish the schedule of the use by both entities. D. ELECTIONS. The Parties agree to give priority in the use of the Building's third floor meeting rooms A -D to the conduct of County and municipal elections including early voting. V. PARKING The Parties acknowledge that at the time of execution of this Agreement, there is no parking area on or adjacent to the Property for the exclusive use of the City or the County. However, the Parties agree to be subject to the Irrevocable Parking, License Management and Use Agreement between the County, City, and Southlake Central Venture, Southlake Venture West, L.P., Southwest Venture West II, L.P., and Southlake Central Venture II, L.P. executed by County on even date herewith and filed of record on , 2003. The Parties agree to share the cost of constructing the facility and the number of available spaces in the same manner as the ownership of the Property; that Billy Campbell, City Manager March 23, 2011 is, the City shall have 75 percent of the parking spaces on premises, and the County shall have 25 percent of the parking spaces on the Property. The Parties agree that the County Commissioner for Precinct 3 shall have the same parking privileges, if any, as the Mayor or City Manager of the City. VI. COSTS OF OPERATION A. ALLOCATION OF COSTS. The Parties agree that they shall share the costs of operation of the Property in the same proportion as they share ownership, and that each Party shall make payments from current revenues available to the paying Party. The City shall pay 75 percent of the Operating Expenses of the Property and the County shall pay25 percent of the Operating Expenses of the Property. Further, if either Party occupies space originally allotted to the other Party to this Agreement in a manner that causes its share of the Property occupied to increase above its original share as allocated in Article IV, it shall bear a proportionate increase in its share of the Operating Expenses. Each Party agrees to make the expenditures required herein from current revenues. B. EXPENDITURES FOR CAPITAL EXPENSES. 1. The parties agree that they shall share the cost of Capital Expenses in the same proportion as they share ownership unless the parties agree to a different allocation and that each Party shall make payments from current revenues available to it. 2. The City Manager, upon consultation with and concurrence of the County's designated representative, may authorize such expenditures of less than $25,000. The County agrees it shall not unreasonably withhold its concurrence. 3. The Parties agree that except for emergency expenditures, expenditures for Capital Expenses in excess of $25,000 shall not be made without approval of the governing bodies of the City and the County. Each Party agrees that that it will not unreasonably withhold such approval. Whether a proposed expenditure for a Capital Expense is reasonable shall include an assessment of the availability of funds in the current year and whether the proposed expenditure is due to an emergency expenditure. City shall make an emergency expenditure only to secure the building and the safety of its occupants. In the event the City must make an emergency expenditure for a Capital Expense, the City shall first attempt to notify County's representative and shall document such attempt. County agrees to provide City with the telephone numbers or radio frequency where its designated representative may be reached. C. MAINTENANCE OF ALLOTTED SPACE. Each Party agrees to be responsible for the costs and maintenance of the furnishings, fixtures, decor, and flooring of the space it occupies. Billy Campbell, City Manager March 23, 2011 VII. CONTROL OF OPERATION OF THE PREMISES A. GENERALLY. The parties agree that the City's City Manager shall have general authority over the Building. Provided, however, that the City Manager shall, except in the case of an emergency situation, where the City Manager reasonably must take actions to secure the building and the safety of its occupants, consult with the County's representative prior to making any major change in the operations of the Building. In the event the City must make an emergency expenditure for a Capital Expense, the City shall first attempt to notify County's representative and shall document such attempt. Subject to the terms of this Agreement, each Party shall have exclusive control over the decor, furnishing and equipment of the areas it occupies in the Building, except that such decor shall not unreasonably detract from the overall building decor and design. The County designates Tarrant County Director of Facilities as its designated representative to administer its obligations under this Agreement. County may designate another representative effective upon giving notice to the City. B. MAINTENANCE SERVICES. The City shall bear the responsibility of hiring janitorial and ground maintenance and landscaping service and the costs of such services shall be an Operating Expense. In the event the City shall decide to use its personnel to provide janitorial and landscaping services, the Parties shall share the expense of such personnel as an Operating Expense on a proportionate basis as set forth in Section VI.A. C. COMMON AREAS. The Parties agree that the Building shall be open during normal business hours. The City and the County may use common area conference and meeting rooms in the Building, subject to reasonable notice and in accordance with the Town Hall Use Policy adopted by the City Council on July 17, 2001, a copy of which is attached hereto as Exhibit "D" and as may be amended from time to time. D. NO WARRANTY. All repair, maintenance, management and other services to be performed by City employees involve the exercise of professional judgment and County expressly waives any claims for breach of warranty arising from the performance of those services. E. RESPONSIBILITY FOR DAMAGES. Each Party shall, at its expense, repair any damage to any portion of the Property, including the roof, foundation, or structural components and exterior walls of the Building caused by the Party's acts or omissions. F. ALTERATIONS, ADDITIONS AND IMPROVEMENTS. Each Party shall not create any openings in the roof or exterior walls, or make any structural alterations, additions or improvements to the Property without the prior written consent of the other. Consent for structural alterations, additions or improvements shall not be unreasonably withheld by City or County. Whether a proposed expenditure for a Capital Expense is reasonable shall include an assessment of the availability of funds in the current year and whether it is an emergency expenditure. Either Party may erect or install trade fixtures, shelves, bins, and machinery provided the Party complies with all applicable governmental laws, ordinances, codes, and regulations. Billy Campbell, City Manager March 23, 2011 G. ACCESS. Each Party shall have access to the Property twenty -four hours a day, seven days a week. Each Party shall have the ability to have access to air conditioning and heating equipment function in the Building, whether or not such equipment is being operated elsewhere on the Property. H. BUILDING RULES. The County agrees to require its employees to comply with rules and procedures relating to the Property adopted by the City and applied to City employees. Such rules shall be applied equally to City and County employees and may not diminish the County's rights under this Agreement. VIII. DAMAGE OR DESTRUCTION A. PARTIAL DAMAGE. If the Building or other improvements situated on the Property are damaged by fire, tornado, or other casualty, this Agreement shall not terminate, but City shall proceed with reasonable diligence to rebuild or repair the Building and other improvements on the Property (other than leasehold improvements made by any other occupant of the Building) to substantially the condition in which they existed prior to the damage. B. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Building or other improvements situated on the Property are substantially or totally destroyed by fire, tornado, or other casualty, or so damaged that rebuilding or repairs cannot reasonably be completed within 120 days from the date City receives written notification by County of the occurrence of the damage, either City or County may terminate this Agreement by promptly delivering a written termination notice to the other Party, If neither Party promptly terminates this Agreement, City shall proceed with reasonable diligence to rebuild and repair the Building and other improvements (except that County shall rebuild and repair County's fixtures and improvements in the Building). ARTICLE IX. INSURANCE AND INDEMNIFICATION A. CASUALTY INSURANCE. During the term of this Agreement, City shall maintain policies of insurance covering loss of or damage to the Property in an amount or percentage of replacement value as City deems reasonable in relation to the age, location, type of construction and physical condition of the Building and the availability of insurance at reasonable rates. The minimum amounts of such insurance policies shall be as follows: Coverage in an amount equal to at least ninety percent (90 %) of the full replacement cost of the building as of the date of loss. The policies shall provide protection against all perils included within the classification of fire and extended coverage and any other perils which City deems necessary. This expense shall be an Operating Expense. County shall, at County's expense, maintain insurance on its fixtures, equipment and building improvements, as County deems necessary to protect County's interest. County shall not do or permit to be done anything which invalidates any insurance coverages. Any casualty insurance carried by City or County shall be for the sole benefit of the Party carrying the insurance and under its sole control, provided that any benefits paid under the casualty insurance policies paid for as an Operating Expense shall be applied for the benefit of both parties. County shall be responsible for insurance on County's personal property. Billy Campbell, City Manager March 23, 2011 B. INCREASED PREMIUMS. Neither Party shall permit any operation or activity to be conducted, or storage or use of any volatile or any other materials, on or about the Property that would cause suspension or cancellation of any fire and extended coverage insurance policy carried by City, or increase the premiums therefore, without the prior written consent of City. C. LIABILITY INSURANCE. During the Term of this Agreement, City may maintain a commercial general liability policy of insurance, at City's expense, insuring City against liability arising out of the ownership, use, occupancy, or maintenance of the Property. Such insurance policies shall be an Operating Expense. City shall name County as an additional insured under a comprehensive policy of commercial general liability insurance maintained by City, with the following minimum amounts: $2,000,000. City shall deliver a copy of the policy or certificate (or a renewal) to County. County may, at County's expense, maintain other liability insurance as County deems necessary to protect County. The Parties agree to review and adjust insurance coverages biannually. D. RELEASES. City and County agree to share in liability arising from third party's claims in a percentage equal to each Party's ownership interest, except that this agreement shall not apply to: 1. any damages or costs paid by insurance carriers or costs which are eligible to be paid in accordance with the rules governing the County's self - insurance program; 2. any worker's compensation claims and Each Party waives the right to subrogate against the other Party for damages paid for worker's compensation claims; 3. any claims resulting from the negligent act or omission of an independent contractor of the County; and 4. any claims resulting from the negligent act or omission of an independent contractor of the City for work performed within the space occupied by the City, excluding Common Areas. E. SUBROGATION. Notwithstanding anything to the contrary contained in the Agreement, whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other casualty or occurrence is incurred by either of the parties to this Agreement, in connection with the Property, and (b) such Party is then covered in whole or in part by insurance with respect to such loss, cost, damage, or expense, then to the extent that such loss or damage is covered by such insurance policies, the Party so insured hereby releases and waives the other Party, its employees, agents and contractors from any liability it may have on account of such loss, cost, damage or expense and waives any right of subrogation which might otherwise exist on account thereof, to the extent that such loss is recoverable under such insurance policies. The release and waiver contained in this Section is intended to expressly release and waive the liability of each Party from the consequences of its negligent acts or omissions, subject to the terms of this Section. City and County shall use their respective best efforts to obtain a release and waiver of subrogation from their Billy Campbell, City Manager March 23, 2011 respective insurance carriers and obtain any special endorsements, if required by their insurer, to evidence compliance with this waiver. The terms and provisions of this Section shall survive the termination or expiration of this Agreement. The provisions of this Section are intended for the benefit of the parties hereto, and are not intended to benefit third parties. X. REPRESENTATIONS A. CITY REPRESENTATIONS. City represents that: 1. It has the power and authority to enter into and perform this Agreement as evidenced by the resolution or ordinance attached hereto, marked Exhibit "D," incorporated herein by reference for all purposes; 2. This Agreement has been duly executed and is a legal, valid and binding obligation enforceable in accordance with its terms; and 3. The City represents that conveyance of the Property has been authorized by its governing body. B. COUNTY REPRESENTATIONS. County represents that: 1. It has the power and authority to enter into and perform this Agreement; and 2. This Agreement has been duly executed and is a legal, valid and binding obligation enforceable in accordance with its terms. C. SURVIVAL. These representations and warranties shall continue throughout the term of this Agreement. This Agreement shall commence on , 2003 and continue for a term of one year and shall be renewed each for year for an additional one year term, unless either Party shall give the other Party 180 days notice, or unless earlier terminated pursuant to Article VII hereof. XII. MISCELLANEOUS MATTERS A. FORCE MAJEURE. If performance by either Party of any term, condition or covenant in this Agreement is delayed or prevented by any Act of God, strike, lockout, shortage of material or labor, restriction by any governmental authority, civil riot, flood, or any other cause not within the reasonable control of the Party, the period for performance of the term, condition or covenant shall be extended for a period equal to the period the City or County is so delayed or prevented. B. INTERPRETATION. The captions of the Articles or Sections of this Agreement are to assist the parties in reading this Agreement and are not a part of the terms or provisions of this Agreement. Whenever required by the context of this Billy Campbell, City Manager March 23, 2011 Agreement, the singular shall include the plural and the plural shall include the singular, and the masculine, feminine and neuter genders shall each include the other. C. WAIVERS. All waivers to provisions of this Agreement must be in writing and signed by the waiving Party. The delay or failure of City or County to enforce any provisions of this Agreement shall not be a waiver and shall not prevent the parties from enforcing that provision or any other provision of this Agreement in the future. D. SEVERABILITY. A determination by a court of competent jurisdiction that any provision of this Agreement is invalid or unenforceable shall not cancel or invalidate the remainder of that provision of this Agreement, which shall remain in full force and effect. E. AMENDMENTS OR MODIFICATIONS. This Agreement is the only agreement between the parties pertaining to Property and no other agreements are effective unless made a part of this Agreement. All amendments to this Agreement must be in writing and signed by all parties. Any other attempted amendments shall be void. F. NOTICES. All notices and other communications required or permitted under this Agreement must be in writing and shall be deemed delivered, whether actually received or not, on the earlier of: (i) actual receipt if delivered in person or by messenger with evidence of delivery; or (ii) upon deposit in the United States Mail as required below. Notices delivered by mail must be deposited in the U.S. Postal Services, first class postage prepaid and properly addressed to the intended recipient as set forth in the Preamble hereof. Either Party may change its address for notice by delivering written notice of its new address to all other parties in the manner set forth above. This Agreement is executed and agreed to on this the day of 2003 by the City of Southlake and the County of Tarrant. FOR THE CITY OF SOUTHLAKE By: ANDY WAMBSGANSS, MAYOR FOR TARRANT COUNTY By: TOM VANDERGRIFF, COUNTY JUDGE ATTEST: ATTEST: CITY SECRETARY COUNTY CLERK Billy Campbell, City Manager March 23, 2011 Exhibit "A" The Property Billy Campbell, City Manager March 23, 2011 Exhibit "B" The Common Areas Billy Campbell, City Manager March 23, 2011 Exhibit "C" The Deed Billy Campbell, City Manager March 23, 2011 Exhibit "D" Town Hall Use Policy