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HomeMy WebLinkAboutItem VIII-B-4WASHINGTON [ AGENDA BILL APPROVAL FORM ] Aqenda Subiect: Resolution No. 3666 Date: December 4, 2003 Department: Finance Attachments: Resolution No. 3666 and Exhibit A Budget Impact: Administrative Recommendation: City Council adopt Resolution No. 3666 Backqround Summary: The City is desirous of hiring a contractor for the day-to-day operation and management of the City- owned Auburn Municipal Airport. This resolution authorizes the Mayor and City Clerk to execute an agreement with Airport Management Group, LLC to act as the contractor as set forth in the attached agreement. N1215-2 A3.16.1 Reviewed by Council & Committees: DArts Commission COUNCIL COb~MITTEES: D Airport [~ Bearing Examiner []Finance [] Human Services [~Municipal Serv. []Library Board []Planning & CD Iq Park Board []Public Works [] Planning comm. 7qOther Reviewed by Departments & Divisions: D Human Resources [] Building [] M&O [] Cemetery [] Mayor [] Finance [] Parks [] Fire [] Planning [] Legal [] Police [] Public Works Action: Committee Approval: [~Yes DNo Council Approval: [~Yes []No Referred to Tabled Call for Public Hearing Until / / Until / / / / Councilmember: Singer Meeting Date: December 15, 2003 Staff: Coleman Item Number: VIII.B.4 AUBURN * MORE THAN YOU IMAGINED RESOLUTION NO. 3 6 6 6 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF: AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT FOR THE DAY-TO- DAY OPERATION AND MANAGEMENT OF THE AUBURN MUNICIPAL AIRPORT BETWEEN THE CITY OF AUBURN AND AIRPORT MANAGEMENT GROUP, LLC. WHEREAS, the City is engaged in the operation of the Auburn Municipal Airport (Airport); and, WHEREAS, the City is desirous of hiring the Contractor to undertake the physical and financial responsibilities of the operation, management and maintenance on a day-to-day basis of the Airport; and, WHEREAS, the City has satisfied itself that the Contractor has the requisite knowledge, experience and ability to perform the tasks set forth in the attached agreement, and that this Agreement contains adequate safeguards to protect the interests of all concerned who use or are affected by the Airport. THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, IN A REGULAR MEETING, DULY ASSEMBLED, HEREWITH RESOLVES AS FOLLOWS: Section 1. The Mayor and City Clerk of the City of Auburn are hereby authorized to execute an Agreement with Airport Management Group, [.LC, for the day-to-day operation and management of the Auburn Municipal Airlport. A copy of said Agreement is attached hereto, design~ated as Exhibit "A" and incorporated by reference in this Resolution. Resolution No. 3666 December 4, 2003 Page 1 of 2 Section 2. This Resolution shall take effect and be in full force and effect upon passage and signature hereon. DATED and SIGNED this __ day of December, 2003. CITY OF AUBURN PETER B. LEWIS MAYOR ATTEST: Danielle E. Daskam APPROVED A,~TO_FO RM: City Attorney Resolution No. 3666 December 4, 2003 Page 2 of 2 AGREEMENT FOR THE DAY-TO-DAY OPERATION AND MANAGEMENT OF THE AUBURN MUNICIPAL AIRPORT BETWEEN THE CITY OF AUBURN, WASHINGTON AND AIRPORT MANAGEMENT GROUP, LLC. THIS AGREEMENT made and entered into on this day of ., 200 , by and between the City of Auburn, a municipal corporation of the State of Washington, hereinafter referred to as "City" and Airport Management Group, LLC, hereinafter referred to as the "Contractor." WITNESSETH: WHEREAS, the City is engaged in the operation of the Aubum Municipal Airport (Airport); and, WHEREAS, City is desirous of hiring the Contractor to undertake the physical and financial responsibilities of the operation, management and maintenance on a day to day basis of the Airport; and, WHEREAS, the City has satisfied itself that the Contractor has the requisite knowledge, experience and ability to perform the tasks set forth in this Agreement, and that this Agreement contains adequate safeguards to protect the interests of all concerned who use or are affected by theAirport. NOW, THEREFORE, in consideration of the mutual covenants, and benefits contained herein, and subject to the following terms, conditions, covenants and provisions, THE PARTIES HERETO DO MUTUALLY AGREE as follows: Scope of Services. The Contractor agrees to perform in a good and professional manner the tasks described on Exhibit "A" attached hereto and incorporated herein by this reference. (The tasks described on Exhibit "A" shall be individually referred to as a "task," and collectively referred to as the "services.") The Contractor shall perform the services as an independent contractor and shall not be deemed, by virtue of this Agreement and the performance thereof, to have entered into any partnership, joint venture, employment or other relationship with the City. Exhibit A Resolution No. 3666 Page 1 Additional Services. From time to time hereafter, the parties hereto may agree to the performance by the Contractor of additional services with respect to related work or projects. Any such agreement(s) shall be set forth in writing and shall be executed by the respective parties prior to the Contractor's performance of the services there under, except as may be provided to the contrary in Section 3 of this Agreement. Upon proper cornpletion and execution of an addendum (agreement for additional services), such addendum shall be incorporated into this Agreement and shall have the same force and effect as if the terms of such addendum were a part of this Agreement as originally executed. The performance of services pursuant to an addendum shall be subject to the terms and conditions of this Agreement except where the addendum provides to the contrary, in which case the terms and conditions of any such addendum shall control. In all other respects, any addendum shall supplement and be construed in accordance with the terms and conditions of this Agreement. Performance of Additional Services Prior to Execution of an Addendum. The parties hereby agree that situations may arise in which services other than those described on Exhibit "A" are desired by the City and the time period for the completion of such services makes the execution of an addendum impractical prior to the commencement of the Contractor's performance of the requested services. The Contractor hereby agrees that it shall perform such services upon the oral request of an authorized representative of the City pending execution of an addendum, at a rate of compensation to be agreed to in connection therewith. The invoice procedure for any such additional services shall be as described in Section 7 of this Agreement. Contractor's Representations. The Contractor hereby represents and warrants that he has all necessary licenses and certifications to perform the services provided for herein, and is qualified to perform such services. Schedule. Upon receipt of authorization to proceed, the Contractor will perform its services in a diligent and timely manner, provided that the Contractor shall not be liable for delays caused by circumstances out of the Contractor's control. The City shall give prompt written notice to the Contractor whenever the City becomes aware of any circumstance that may affect the timing of the Scope of Services. Upon receipt of such notice, the Contractor shall respond to the notice by appropriate action and report thc response to the City within ten (10) days. City's Responsibilities. The City shall do the following in a timely manner so as not to delay the services of the Contractor: a. Designate in writing a person to act as the City's representative with respect to thc services. The City's designee shall have complete authority to transmit instructions, receive information, interpret and define the City's policies and decisions with respect to the services. Exhibit A Resolution No. 3666 Page 2 b. Furnish the Contractor with all information, criteria, objectives, schedules and standards for the project and the services provided for herein. c. Arrange for access to the property or facilities as required for the Contractor to perform the services provided for herein. d. Examine and evaluate all studies, reports, memoranda, plans, sketches, and other documents prepared by the Contractor and render decisions regarding such documents in a timely manner to prevent delay of the services. e. Provide certain equipment and facilities in connection herewith, as follows: (1) Provide the Contractor with the facilities and equipment (:snow plow, tractor - on Airport premises only) and supplies, provided that the Contractor shall use the same in accordance with its intended use and good practices, ands shall maintain such equipment in good condition at its expense. (2) Allow access to Airport facilities, and allow use of the Airport Office. The Contractor and the City will identify the condition of all items of equipment and facilities and include the same on an "Inventory/Status List". If the parties do not agree on the identity and/or condition of any such facility or equipment, they shall submit the area(s) of disagreement to a mutually agreed upon third party to determine such identity(ies) and/or condition(s). f. Provide Major Capital and Equipment Expenses: Expenses for major capital repair and replacement of Airport facilities or equipment that could not be reasonably anticipated, and which do not result from negligence on the part of the Contractor shall be the responsibility of the City. These expenses shall include, but not be limited to, the following: (1) Airport water supply and pumping system; (2) Storm drainage system and piping; (3) Major repairs to paved or improved areas to include the runway, aprons, ramps, and taxiways. (4) Major crack sealing of all City-owned and controlled surfaces; (5) Major repairs or replacement or building roofs on City-owned buildings, except as otherwise provided under a lease or rental agreement. Acceptable Standards. The Contractor shall be responsible to provide, in connection with the services contemplated in this Agreement, work product and services of a quality and professional standard acceptable to the City. Cooperation a. The Contractor and the City shall at all times act in good faith and cooperate fully with each other, their respective agents, employees, contractors, subcontractors, and concessionaires; any other parties leasing or using space or providing services at the Airport, and the patrons of the Airport and the future development thereof, including, but not limited to, the application for and obtaining of any government approvals in connection therewith; the administration and enforcement of the existing agreements; and the general performance by the Contractor of its rights, duties and obligations under this Agreement. Exhibit A Resolution No. 3666 Page 3 The City shall assist the Contractor in securing any approvals froxn the FAA required for the Contractor to operate and maintain the Airport under the City's FAA Operating Certificate. The City and the Contractor jointly shall cooperate to maintain the FAA Operating Certificate throughout the term and any extended term of this Agreement. If this Agreement is terminated for any reason, or if it is to expire on its own terms, the Parties shall make every effort to assure to the fullest extent possible under the circumstances (a) an orderly transition to another provider of the services required under this Agreement, (b) an orderly demobilization of the Contractor's own operations in connection with such services, (c) uninterrupted provision of such services during any transition period, and (d) compliance with the reasonable requests and requirements of the City in connection with such termination or expiration. The Contractor shall interface with the private security services at the .Airport, and shall jointly or separately perform daily inspections of the Airpo]rt premises, insuring that gates are timely opened and closed, and shall further communicate to the City any concerns voiced by tenants or other users of the Airport, and where police, fire of other code or emergency response agency is called in, to cooperate with such responses and/or investigations. Contractor will noti:~y the City immediately, or as soon as practically possible, when there is an emergency type situation. The Contractor shall also obtain and maintain in good standing training to deal with emergencies, as directed by the City. The Contractor shall also be familiar with the City Disaster/Emergency Plans applicable to the Airport and its on-site fuel system, and shall act in accordance therewith. The Contractor shall also notify, when and where appropriate, the FAA, and any other State, regional or federal agencies when accidents, actions or occurrences take place at the Airport. In any event, the Contractor shall notify the City, and with respect to a question of whether another outside agency should also be notified, and in the event that the Contractor is unsure as to whether such outside agency, or which outside agency should be notified, the question shall be presented to the City and the City shall determine whether such notice shall be provided and to whom such notice would be provided. 9. Compensation. As compensation for the Contractor's performance of the services provided for herein, other than the fueling services described in section F of Exhibit A, the City shall pay the Contractor the fees and costs specified as follows: Twenty-five Thousand Eight Hundred Dollars ($25,800) per month increased annually by either: (a) two percent (2%); or (b) eighty percent (80%) of the increase in the "cost of living, which ever i~ less. The applicable Consumer Price Index is the Consumer Price Index for All Urban. Consumers (1982 - 1984 = 100) for Seattle - Tacoma, as published by the United States ,Government for the month of October. As additional incentive to the contractor, should total annual gross revenues from the airport, receipted to the City in 2008, exceed $750,000, there shall be paid to the contractor a one time incentive fee of $100,000. It is provided, however, that, in connection with the sale of fuel at the Airport by the Contractor, the amount of fuel purchased by the City and on hand at the commencement of the term of Exhibit A Resolution No. 3666 Page 4 this Agreement shall be inventoried, and the City's cost for said fuel shall be deducted from the amount of monthly compensation otherwise payable to the Contractor, with monthly payments being resumed after the amount of such fuel costs haw: been fully deducted from the amount payable as the monthly payments. Compensation to the Contractor for performing the fueling services shall be as described in section F of Exhibit A. The Contractor shall submit to the City an invoice or statement and the City shall process the invoice or statement in the next billing/claim cycle following receipt of the invoice or statement, and shall remit payment to the Contractor thereafter in the normal course, subject to any conditions or provisions in this Agreement or addendum. 10. Term of Agreement. The Term of this Agreement shall be for an initial five (5) year period commencing on the first day of January, 2004, and terminating on the 31st day of December, 2009, unless otherwise agreed to in writing by the parties. It is further provided that the City may terminate this agreement January 2007, without penalty, upon reasonable notice to the contractor unless the agreement is otherwise/earlier terminated as provided herein. 11. Reports. The Contractor shall submit to the City (to the Mayor or the Mayor's designee and a copy to the City of Auburn Airport Advisory Board) not less than monthly, during: the term of this Agreement and any extension hereof, periodic activity reports, summarizing hangar and tie-down space rental receipt amounts, occupancy percentages, fuel sales amounts, and such other information as is requested by the City. The Contractor shall also attend the meetings of the Airport Advisory Board and shall further attend such other meetings as are requested by the City, as directed by the Mayor or the Mayor's designee, to answer questions and/or receive direction form the City. The Airport Advisory Board shall serve as a resource for discussing issues and concerns involving the implement~tion of this Agreement. 12. Records Inspection and Audit. All compensation payments shall be subject to the adjustments for any amounts found upon audit or otherwise to have been improperly invoiced, and all records and books of accounts pertaining to any work performed under this Agreement shall be subject to inspection and audit by the City for a period of up to three (3) years from the final payment for work performed under this Agreement. 13. Continuation of Performance. In the event that any dispute or conflict arises between the parties while this Contract is in effect, the Contractor agrees that, notwithstanding such dispute or conflict, the Contractor shall continue to make a good faith effort to cooperate and continue work toward successful completion of assigned duties and responsibilities. 14. Administration of Agreement. This Agreement shall be administered by Jamelle R. Garcia, on behalf of the: Contractor, and by the Mayor or designee of the City, or designee, on behalf of the City. Any written Exhibit A Resolution No. 3666 Page 5 notices required by the terms of this Agreement shall be served on or mailed to the following addresses: City of Auburn Auburn City Hall 25 West Main Auburn, WA 98001-4998 (253) 931-3000 FAX (253) 931-3053 Contractor Jamelle R. Garcia Airport Management Group, LLC c/o Auburn Flight Service, Inc. 506 - 23rd NE Auburn, WA 98002 (254) 854-4960 15. Notices. All notices or communications permitted or required to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or deposited in the United States mail, postage prepaid, for mailing by certified mail, return receipt requested, and addressed, if to a party of this Agreement, to the address for the party set forth above, or if to a person not a party to this Agreement, to the address designated by a party to this Agreement in the foregoing manner. Any party may change his, her or its address by giving notice in writing, stating his, her or its new address, to any other party, all pursuant to the procedure set :forth in this section of the Agreement. 16. Insurance. The Contractor shall be responsible for maintaining, during the term of this Agreement and at its sole cost and expense, the types of insurance coverages and in the amounts described below. The Contractor shall furnish evidence, satisfactory to the City, of all such policies. During the term hereof, the Contractor shall take out and maintain in full force and effect the following policies: a. Comprehensive public liability insurance, including automobile and property damage, insuring the Contractor, and the City as an additional insured, against loss or liability for damages for personal injury, death or property daxnage arising out of or in connection with the performance by the Contractor of its obligations hereunder, with minimum liability limits of $14,000,000.00 combined[ single limit for personal injury, death or property damage in any one occurrence. b. Such workmen's compensation and other similar insurance as may be required by law. 17. Indemnification. a. The Contractor shall indemnify and hold harmless the City and its officers, agents and employees, or any of them from any and all claims, actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever, by any reason of or arising out of the negligent act or omission of the Contractor, its officers, agents, employees, or any of them relating to or arising out of the performance of this Agreement. If a final judgment is rendered against the City, its officers, agents, employees and/or any of them, or jointly against the City and the Contractor and Exhibit A Resolution No. 3666 Page 6 their respective officers, agents and employees, or any of them, the Contractor shall satisfy the same to the extent that such judgment was due to the Contractor's negligent acts or omissions. The City shall indemnify and hold harmless the Contractor and its officers, agents and employees, or any of them from any and all claims, actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever, by any reason of or arising out of the negligent act or omission of the City, its officers, agents, employees, or any of them relating to or arising out of the performance of this Agreement. If a final judgment is rendered against the Contractor, its officers, agents, employees and/or any of them, or jointly against the Contractor and the City and their respective officers, agents and employees, or any of them, the City shall satisfy the same to the extent that such judgment was due to the City's negligent acts or omissions. 18. Assignment. Neither party to this Agreement shall assign any right or obligation hereunder in whole or in part, without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld. No assignment or transfer of any interest under this Agreement shall be deemed to release the assignor from any liability or obligation under this Agreement, or to cause any such liability or obligation to be reduced to a secondary liability or obligation. 19. Services in Potential Competition with Contractor. The Contractor shall provide services to clients, customers and tenants of the .Airport with fairness and without regard to whether a client, customer or tenant is engaged in a business that competes or potentially competes with a business of the Contractor, or with a business in which any principal, partner or participant in the Contractor is also a principal, partner or participant. Toward that end, the Contractor shall notify ALL clients, customers and tenants and prospective clients, customers and tenants of the Airport of this requirement, and shall also notify them that if they feel that the Contractor has not treated them in a fair manner, they may seek relief from the Mayor or lhe Mayor's designee of the City in terms of the services, use of premises or other activity related to the Airport. Decisions by the Mayor or designee in such cases shall be binding on the parties, provided that any party aggrieved by such decision may appeal the decision to the City of Auburn Hearing Examiner, according to the procedures of the City of Auburn therefor. 20. Amendment, Modification or Waiver. No amendment, modification or waiver of any condition, provision or term of this Agreement shall be valid or of any effect unless made in writing, signed by the party or parties to be bound, or such party's or parties' duly authorized representative(s) and specifying with particularity the nature and extent of such amendment, modification or waiver. Any waiver by any party of any default of the other party shall not effect or impair any right arising from any subsequent default. 21. Remedies not Limited. Exhibit A Resolution No. 3666 Page 7 Nothing herein shall limit the remedies or rights of the parties hereto under and pursuant to this Agreement. 22. Termination. a. Either party may terminate this Agreement upon written notice to the other party if the other party fails substantially to perform in accordance with the terms of this Agreement through no fault of the party terminating the Agreeraent. It is provided, however, that the terminating party shall give the other pretty notice of the specific area(s) of performance that has/have not been performed and shall further give seven (7) days for such performance to be fully performed in accordance with the terms of this Agreement prior to termination. If such failure to perform is corrected within said seven (7) day period, then the Agreement shall not be subject to termination under this sub-paragraph. b. The City may also terminate this Agreement upon not less than one hundred twenty (120) days written notice to the Contractor if the services provided for herein are no longer needed from the Contractor. c. If this Agreement is terminated through no fault of the Contractor, the Contractor shall be compensated for services performed prior to termination in accordance with the rate of compensation provided herein. 23. Parties in Interest. This Agreement shall be binding upon, and the benefits and obligations provided for herein shall inure to and bind, the parties hereto and their respective successors and assigns, provided that this section shall not be deemed to permit any transfer or assignment otherwise prohibited by this Agreement. This Agreement is for the exclusive benefit of the parties hereto and it does not create a contractual relationship with or exist for the benefit of any third party, including contractors, sub-contractors and their sureties. 24. Costs to Prevailing Part,/. In the event of such litigation or other legal action, to enforce any rights, responsibilities or obligations under this Agreement, the prevailing parties shall be entitled to receive its reasonable costs and attorney's fees. 25. Applicable Law. This Agreement and the rights of the parties hereunder shall be governed by the interpreted in accordance with the laws of the State of Washington and venue for any action hereunder shall be in King County, Washington; provided, however, that it is agreed and understood that any applicable statute of limitation shall commence no later than the substantial completion by the Contractor of the services. 26. Captions, Headings and Titles. All captions, headings or titles in the paragraphs or sections of this Agreement are inserted for convenience of reference only and shall not constitute a ]part of this Agreement or act as a limitation of the scope of the particular paragraph ocr sections to which they apply. As used herein, where appropriate, the singular shall include the plural and vice versa and masculine, feminine and neuter expressions shall be interchangeable. Interpretation or construction of this Agreement shall not be affected by any Exhibit A Resolution No. 3666 Page 8 determination as to who is the drafter of this Agreement, this Agreement having been drafted by mutual agreement of the parties. 27. Severable Provisions. Each provision of this Agreement is intended to be severable. If any provisi[on hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this Agreement. 28. Entire Agreement. This Agreement contains the entire understanding of the parties hereto in respect to the transactions contemplated hereby and supersedes all prior agreements and understandings between the parties with respect to such subject matter. 29. Counterparts. This Agreement may be executed in multiple counterparts, each of which :shall be one and the same Agreement and shall become effective when one or more counlerparts have been signed by each of the parties and delivered to the other party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective the day and year first set forth above. CITY OF AUBURN CONTRACTOR Peter B. Lewis, Mayor Name: Title: Attest: Name: Danielle E. Daskam City Clerk Title: Daniel B. Heid,XC2ty Attgme'y ~ ...... STATE OF WASHINGTON COUNTY OF KING ON THIS __ day of appeared and me known to be the and Exhibit A Resolution No. 3666 Page 9 200 before me, personally , to of the Contractor, Airport Management Group, LLC,_the party who executed - the company that executed the within and foregoing instrument, and acknowledged said instrument to be his/her/their the free and voluntary act and deed of said corporation/company, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument. GIVEN under my hand and official seal this day of ,200 NOTARY PUBLIC in and for the State of Washington, residing at My Commission Expires: STATE OF WASHINGTON ) COUNTY OF KING ) ON THIS day of ,200 , before me, personally appeared Peter B. Lewis and Danielle E. Daskam, to me known to be the Mayor and City Clerk of the City of Auburn, Washington, the municipal corporation that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said municipal corporation, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument. GIVEN under my hand and official seal this day of ,200 NOTARY PUBLIC in and for the State of Washington, residing at My Commission Expires: Exhibit A Resolution No. 3666 Page 10 EXHIBIT "A" SCOPE OF SERVICES CONTRACTOR shall prepare, negotiate, administer, and enforce on behalf of, and in the name of, CITY all of the lease agreements, contracts, documents, and instruments relating to the Auburn Municipal Airport (Airport) or its operation to which CITY is a party, consistent with the terms of this Agreement and in a manner that CONTRACTOR shall deem necessary or desirable for the efficient operation, maintenance, and management of the Airport, provided that if CONTRACTOR through common management or otherwise, holds an ownership or controlling interest in a tenant of the Airport subject to a lease agreement, CONTRACTOR shall not negotiate, administer or enforce such lease with such related tenant or with any commercial competitor of CONTRACTOR which is also a tenant of the Airport but rather these activiities shall be performed by the Mayor of CITY or such representative as the Mayor shall From time to time designate in writing. CITY specifically authorizes CONTRACTOR to request and demand all rent and other such charges and to institute legal proceedings, as CONTRACTOR shall deem necessary or appropriate, on behalf of, and in the name of, CITY to collect such rent and other charges. All rent and other charges described below shall be collected by CONTRACTOR on behalf of CITY, and accounted for as provided in the Agreement. However, commencement of legal proceedings is subject to final approval of CITY. CONTRACTOR may propose capital improvement or property development work as a result of its concept development and planning functions or related work as. set forth in this Agreement. CONTRACTOR will manage and operate the Airport for the use and benefit of CITY and the general public, in accordance with the requirements of this Agreement, and on fair and reasonable terms without unjust discrimination, seven days a week, twenty-four (24) hours a day, in a safe and efficient manner and maintain it in a clean, orderly, safe, and operational condition in conformity with applicable Federal, State and local laws, rules and regulations. Page 11 Without limiting the foregoing services to be provided by CONTRACTOR services shall include any of the following: operation, management, concession, and janitorial service as needed in any CITY-owned Airport building or activity; advertising; compliance with applicable security requirements of the FAA or other jurisdictional agency, subject to paragraph V; airport and grounds maintenance, ramp operations, airfield signage, and navigation, fixed base operations (FBO) and general aviation facilities maintenance; vehicle maintenance; de-icing; operation and management; grant management (subject to control by CITY of grant compliance); public relations, planning; legal, and marketing. CONTRACTOR shall not cause or permit any activity or action at the Airport or on property in the vicinity of the Airport which would interfere with its use of the Airport for Airport purposes. CONTRACTOR shall provide fueling services at the Airport. In connection therewith, CONTRACTOR shall be responsible for purchasing the fuel wholesale, other than the inventory of fuel on hand at the commencement of this Agreement, which im/entory shall be transferred to CONTRACTOR upon deduction of off-setting payments as provided in Paragraph 7 of the Agreement. CONTRACTOR shall be entitled to set the retail price of the fuel and to retain the proceeds from such fuel sales, Provided that CONTRACTOR shall compensate CITY in an amount determined as follows: CONTRACTOR shall pay CITY an amount equal to not less than $.085 per gallon from fuel sales as a FLOWAGE FEE, and CONTRACTOR shall further pay to CITY an amount of One Thousand Five Hundred Dollars ($1,500) per month as compensation for depreciation of CITY's investment in the fuel dispensing equipment, the total of which Flowage Fee and depreciation compensation shall not be less than Two Thousand Three Hundred Sixty- Five Dollars ($2,365) per month. CONTRACTOR will develop and submit recommended schedules of rates, fees, and charges (exclusive of the retail price for fuel) annually for approval by CITY, provided that if CONTRACTOR, through common management or otherwise, holds an ownership or controlling interest in a tenant at the Airport whose rates, fees or charges would be affected by such recommended schedules, CONTRACTOR will not recommend schedules for such related tenant or for any commercial competitor of CONTRACTOR which is also a tenant but rather such recommendation will be made by the Mayor of Page 12 CITY or such authorized representative as the Mayor shall from time to time designate for this purpose in writing. The schedule of rates, fees, and charges will not alter the rental rates in existing leases or agreements except as provided therein. CONTRACTOR will also collect and reconcile all rental and/or lease payments and fees due, using uniform procedures to provide accountability, control and security of funds. CONTRACTOR shall assist CITY, with respect to CITY's dealings with all applicable Federal and State authorities, provided, however, that CITY shall remain solely responsible to the Federal Aviation Administration ("FAA") fbr the compliance with CITY's obligations under the law and under Federal Grant Agreements unless such compliance is the responsibility of CONTRACTOR under this Agreement. CONTRACTOR is aware of and agrees to honor and respect the e~:isting grant agreements between the CITY and FAA, including related FAA assurances. No exclusive right for the use of the Airport by any persons providing, or intending to provide, aeronautical services to the public shall be permitted within the meaning of Section 308 of the Federal Aviation Act of 1958. Security: CONTRACTOR agrees to provide Airport security during non-business office hours 365 days per year. The security personnel shall patrol the improved and developed areas of the Airport during non-business daylight hours and during nighttime hours at irregular intervals. A security log shall be maintained documenting security patrols. Any unauthorized use of structures, equipment, or property, or unauthorized entry upon Airport premises shall be promptly reported to the CITY police or such other authority designated in writing by the CITY. Hours of Operation (business hours): CONTRACTOR shall operate the Airport for public access twenty-four (24) hours daily. At least one CONTRACTOR staff person shall be available at the Airport to assist the public 9:00 a.m. to 6:00 p.m., seven days per week. During non-business hours, CONTRACTOR shall maintain a method of contacting the on-duty staff person for assistance, via pager or cellular telephone. CONTRACTOR will maintain and post a list, easily accessible to those needing fuel or other services, of FBOs able to provide fueling and ramp services on short notice outside of usual business hours. Operating Policies and Procedures: CONTRACTOR shall Page 13 provide and maintain a staff training program and complete library of Airport operating policies and procedures at the offices of the CONTRACTOR at the Airport. Collection of Fees and Rentals: CONTRACTOR shall provide for routine invoicing and collection of all fees, rentals, and property lease charges due the Airport including: 1. Property leases; 2. Hangar rents; 3. Transient and permanent tie-down fees; 4. Business office rent; 5. Fuel flowage fees, as provided herein; 6. All other Airport revenues CONTRACTOR shall prepare and deposit daily cash receipts received on behalf of the CITY and forward deposit slips to the City of Auburn Finance Department. The CONTRACTOR shall also prepare and submit to the CITY a standard accmmting report of all collections, on a monthly basis, no later than the fifth day after the end of the month in which the collections are made. Emergency Preparedness: CONTRACTOR will have available persons trained in the manner required by applicable FAA regulations to respond to emergencies, such as fires, aircraft incidents, or disasters. Records and Correspondence: CONTRACTOR shall maintain monthly records of all correspondence and financial transactions relating to operation of the Airport. The format and content of the monthly financial report shall be subject to the approval of the CITY's Finance Director. Support of Airport Interest Groups: CONTRACTOR's management shall[ act as the representative of the CITY through participation in meetings and activities of present and future Airport user or interest groups. Reports on such meetings and events shall be included in routine reports to the CITY. Emergency Expenditures: CONTRACTOR shall be authorized to make emergency expenditures in situations where immediate action is deemed necessary to protect the safety of the general public or protect physical assets of Airport. 1. Report: Subsequent to authorizing emergency expenditures, CONTRACTOR shall provide a written report to the CITY within five (5) days. The: einergency Page 14 action shall be reviewed and said review must be completed within fifteen (15) days. 2. Reimbursement: Upon review and approval of the emergency expenditure, the CITY shall process the request for reimbursement to CONTRACTOR. CITY Reimbursement: If CONTRACTOR fails to perform any operational or financial obligation necessary to continued operation of the Airport, CITY reserves the right to perform such obligation of CONTRACTOR as may be necessary to assure continued operation of the Airport and to seek reimbursement from CONTRACTOR. Maintenance 1. Preventive Maintenance/Minor Repairs (a) CONTRACTOR agrees to develop and carry out a program at its sole expense to provide routine maintenance of thc Airport facilities and to provide a continuing program of preventative maintenance: and minor repair activities which shall ensure that the Airport facilities are at all times in a serviceable condition for use in the way and manner they were designed to be used. All maintenance procedures and progn~ans shall be consistent with requirements of Federal, State and CITY agencies. (b) In furtherance of that responsibility, CONTRACTOR will: (1) Regularly inspect the Airport for needed maintenance and repairs; (2) Perform scheduled maintenance including preventative maintenance of the paved surfaces, hangar and other structure preventative maintenance, signage maintenance, mow!ing of grass, fencing maintenance and replacement of normal and customary fuel system consumables; (3)Provide weather related maintenance; (4) Remove, to the greatest extent legally and practically possible, obstructions and restrictions as identified in FAA regulations; and (5) Operate and maintain all Airport owned systems necessary and appropriate for operation of the Airport. Restorative Maintenance - Major Repairs: Subject to expenditures approved, budgeted and authorized by the Mayor of CITY or such representative as the Page 15 Mayor shall from time to time designate in writing, CONTRACTOR agrees to restore and perform major repair, subject to reimbursement by CITY as work compensated under Paragraph 2 of the Agreement, for its reasonable ()ut of pocket costs, as documented by invoices, the existing discrepancies to the Airport property, structures and equipment, listed in Appendix A, and unanticipated major repairs. Unanticipated major repairs include, without limitation, the cost of major repair or replacement of fuel pumps and associated equipment such as fuel dispensing equipment, the fuel tanks and pedestal due to premature failure, and the office building adjacent to the fuel facility, but do not include repairs or replacements of hoses and filters. Estimated costs for the restoration and repair of existing discrepancies are provided in Appendix A, but CONTRACTOR shall be entitled to receive reimbursement of its actual expense in excess of the estimate to the extent such additional expense was reasonably necessary. CITY agrees to provide such reimbursement within thirty (30) days of presentation by CONTRACTOR of its invoices. 3. Temporary Closure: Nothing contained herein shall be construed to require that the Airport be operated for aeronautical use during temporary periods when snow, flood, or other climatic conditions interfere with such operation and maintenance. CONTRACTOR shall remove snow and ice from the runways and taxiways as they accumulate within the capacity of on-site Airport equipment. 4. Federal Facilities: Airport aids operated and maintained by the FAA shall be specifically excluded from any maintenance requirements under this Agreement. 5. Emergency Support Services: CONTRACTOR and the CITY shall each maintain authorized representatives on call at all reasonable times to act on behalf of their respective Parties for unusual, difficult, or emergency maintenance situations at the Airport. Environmental Protection: 1. CONTRACTOR shall develop and maintain policies to assure that the Airport and Airport tenants maintain compliance with Environmental Protection Agency (EPA) standards for treatment of waste oils, fuel, solvents, etc. wl~tich may be used in aircraft, or related to aircraft manufacturing, servicing, or repaJir. Page 16 2. Leases and other contracts and agreements and informational documents developed by CONTRACTOR and approved by CITY, will advise Airport tenants of their obligation to comply with all environmental laws, including, but not limited to, Environmental protection Agency (EPA) standards for treatment of waste oils, fuel, solvents, and other hazardous or toxic materials Which may be used in aircraft or in the course of aircraft manufacturing, servicing or repair, storm water runoff, wetlands, and other laws and requirements of the United States, The State of Washington, or CITY. Violations of those laws will be prosecuted by the responsible government agencies against the tenants directly. 3. Leases, contracts, and other documents will also provide that Airport tenants are liable for compliance with all such laws on their premises, and that they will indemnify CITY and CONTRACTOR as to liability from any such noncompliance and that such noncompliance will also be treated as an event of tenant's default for any costs or expenses incurred as a result of the failure of tenants to comply with environmental laws. Planning, Development, and Audit: 1. Planning and Development: CONTRACTOR shall, under the direction of CITY and with the Airport Advisory Committee provide for planning and development of the Airport and the surrounding Airport lands in cooperation with CITY staff. CONTRACTOR shall encourage development of new facilities and[ services in accordance with the currently approved Airport Master Plan. 2. Airport Layout Plan (ALP): CONTRACTOR shall submit periodic input concerning the ALP to CITY. CITY agrees to update the ALP database and provide revised copies of the ALP as required by CONTRACTOR or interested governing agencies. 3. Five-year Capital Plan: CONTRACTOR shall develop, and rece.mmend for approval, updates to the currently adopted Airport five-year Capital Plan. The Plan shall support requests for the continuing development of the Airport with Federal and State funding. Page 17 4. Proposed Development: In addition to the monthly reports provided for in Paragraph 9 of the Agreement, CONTRACTOR shall provide an annual report summarizing the current status of the Airport which shall include: Proposed Development Plans: CONTRACTOR shall submit, as directed by the Mayor or the Mayor's designee, proposed improvements and developments at the Airport. These changes shall be consistent with the Airport Master Plan and five-year Airport Capital hnprovement Plan adopted and updated periodically for the Airport. 5. Quality Review: It is agreed that CONTRACTOR will allow a review by an independent firm of the quality of management of the Airport. This review may be conducted annually or at any time considered appropriate. CITY' may select a firm to perform the review. CITY will also bear the cost of the review. 6. CONTRACTOR shall make all records relating to this Agreement available for review and audit during normal business hours by the CITY and/or independent auditor. CONTRACTOR shall prepare an annual operating projection for presentation to the CITY that shall include the following: 1. Annual Budget: A detailed projection of revenues and expenses mad expenses relating to Airport operations for each calendar year shall be developed. Except for the first year for the term, the plan shall be submitted by CONTRACTOR on or about August 1 of each year for review and concurrence. During the first year of the term of this Agreement, an initial Airport budget for the period ending December 31 of the first year of the term of the Agreement, shall be submitted to the CITY within ninety (90) calendar days following the effective date of the Agreement. 2. Capital Projection: A detailed projection of capital and major expense items anticipated for the next planning year. Performance Standards: CONTRACTOR must perform reasonably, safely, legally, and in a manner consistent with this Agreement. CONTRACTOR shall also be responsible to provide, in connection with the services contemplated in this Agreement, work product and services of a quality and professional standard acceptable to the City. Page 18 CONTRACTOR shall not conduct operations in or on the Airport in a manner which in the reasonable judgment of CITY: 1. Interferes with the reasonable use by others of the Airport. 2. Hinders police, fire department or other emergency personnel in the discharge of their duties at the Airport. 3. Would constitute a hazardous condition at the Airport. 4. Would involve any illegal purpose. 5. Is not materially in accordance with this Agreement. CONTRACTOR'S Duty to repair: CONTRACTOR shall repair any and all damage to the property of CITY located at the Airport caused by CONTRACTOR, its agents or employees, except to the extent the actions were required by directions of CITY. Compliance With Heightened Security Requirements: CONTRACTOR shall, if required by additional regulatory requirements for Airport security of the FAA,, Homeland Security or any other jurisdictional agency, make changes to the security procedures and/or equipment used to provide Airport security, Provided that CITY agrees to pay as work compensated under Paragraph 2 of the Agreement the reasonable out of pocket cost incurred by CONTRACTOR, subject to prior approval of the CITY, to comply with changed requirements imposed after the effective date for capital improvements such as additional or higher fencing, surveillance or monitoring equipment or other capital investments which are mandated by law. CITY shall have the right to inspect estimates of cost to comply before expenditures are made and suggest alternatives, but CONTRACTOR shall be reimbursed its reasonably necessary cost to comply with new security mandates within twenty days of presenting invoices for such cost, following the inspection described above. Exclusion for Litigation Support The Scope of Services does not include services of CONTRACTOR for :required or requested assistance to support, prepare, document, bring, defend, or assist in litigation undertaken where defended by CITY in connection with this Agreement in am action to which CONTRACTOR is not a party. All such services required or requested of CONTRACTOR by the CITY, will be work compensated under Paragraph 2 of the Agreement. Page 19