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HomeMy WebLinkAbout2005 04-26 Special Meridian City Council SDecial Meetina ADrii 26. 2005 The Meridian City Council special meeting was called to order at 6:30 P.M. on Tuesday, April 26, 2005 by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, Shaun Wardle and Christine Donnell. Members Absent: Charlie Rountree Staff Present: Ted Baird, Anna Canning, Tara Green and Will Berg. Item 1. Roll-call Attendance: Roll call. ~ Shaun Wardle ---X-Christine Donnell ~ Charlie Rountree ----K-Keith Bird ----2L- Mayor Tammy de Weerd Item 2. Adoption of the Agenda: Bird: Madame Mayor. De Weerd: Mr. Bird. Bird: I move that we adopt the agenda as published. Wardle: Second. De Weerd: The motion is to adopt the agenda of the special meeting. All those in favor say aye. ALL AYES. MOTION CARRIED. Item 3. Public Hearing: Course: Request for Transfer of Lease for the Golf De Weerd: We will open this public hearing with remarks first from our attorney. Baird: Thank you Madame Mayor, members of the Council. On this evening's agenda, we have pre-consideration, a draft document that we have been working on. It was published on the City's website last Friday afternoon, it's entitled an Assignment of Lease and Amended Lease Agreement. Now, since it has been published - since that time, I have received a phone call and an email from JoAnne Butler who is an attorney who represents Lake View Meridian Investors, LLC. Ms. Butler had a number of questions. She was only hired by Lake View Meridian City Pre-Council Meeting Aprii 26. 2005 Page2of16 yesterday for reasons in order to avoid a conflict of interest. Her firm was representing Cherry Lane and until that transaction was completed, she couldn't start to represent Lake View, so that's the explanation for the lateness of her comments. She raised a number of comments that I will go through shortly and because those comments require us to get back together and continue to refine this document, we are going to be asking you to defer consideration of the resolution. It's on your agenda and gives us a date certain to come back for final approval of the amended lease. So, in place of that resolution at the end of this evening's hearing, we will be asking you to consider a motion to approve a contingent consent to the assignment of the lease. A draft is in front of you and what that contingent consent to the assignment of lease does is it allows the new operator to temporarily occupy the premises and gives us a certain number of days or weeks, whatever you determine to finalize the lease agreement and it makes your approval of the assignment contingent on them coming back with the final agreement. It also references the document that's been published for today's hearing and uses that as the base for moving forwards so that the terms of the deal have been set as set forth in that document, but it also gives us direction to address the concerns that were raised by the attomey and any concerns that may be raised tonight that you would give us direction to incorporate into that agreement. I will briefly mention the 12 items that were raised by JoAnne Butler and it can give you kind of a flavor that the items still need to be addressed. Item No.1, Ms. Butler indicates that she would prefer if we would attach a copy of the existing lease and incorporate it and indicate that (inaudible) of a conflict that the new amended lease would prevail. We don't see any problem with that, but we would need to receive direction to do that. Item No.2 the version that she got did not have a legal description of the golf course, in fact, we do have that legal description and it was published on the website with the draft. That's not a problem. Item No.3, she noted that Exhibit C anticipates a submittal of a Capital Improvement Plan from Lake View Meridian Investors and it's been my direction from you that you would like to see that before the final lease is approved. That Capital Improvement Plan has been discussed as being a six year plan, where Lake View would identify three holes per year and what they intend to do, so it's been the direction I have received from you that you want to see that before you approve the amended lease. Item No.4, we use various terms, golf premises, golf course, lease premises - we can pick one and stick with it or just put it in a paragraph that says they all mean the same thing because it's been our intention that the existing lease refers to the golf course as the leased premises, but there might be some points where we need to distinguish some of the improvements that they are doing verses the land and so we will let down to everybody's agreement - it was a good. thing for her to point out that it's probably a good idea to get that and one of the reasons that we have been assigned to amend the lease is to take care of the ambiguities that exist in the current one, so we appreciate the time to get it right the first time on this one. Item No.5, it's unclear and this is a point that other people have raised as to when the ownership of the improvements would best in the. city and they are requesting that ownership would remain with them so they could take advantage Meridian City Pre-Councii MeeUng April 26. 2005 Page30f16 of depreciation and then we put in some terms that if there is a default or if at the end of the lease that the purpose that they have constructed are that they have purchased (inaudible) ownership so they could take tax advantage of the depreciation during the term of the lease and again we will seek input from you, but the city doesn't pay taxes, we don't get to take advantage of depreciation, so if we can reach mutual, agreeable terms where both of us know exactly how that's going to flow then that would be a good thing. Item No.6, they are indicating that the ten day notice to cure a default is a little strict, they would us to add a term saying that if they are beginning to cure a default that is incapable of being cured within ten days and they are diligently pursuing the cure that we would not step in and eject them and I think that's a reasonable thing as long as we can verify that they are addressing any notice of default that we've given them. Item No.7, there is a wide scope being wavered on paragraph 7f that they are asking us to modify and they are also asking us that they would not indemnify the city in connection with willful or negligent acts for our missions of the city. Those are both reasonable requests and things that we can continue to negotiate. Item No.8, it's unclear if there is fire or other destructions of the improvements, but the way it's currently written it's unclear as to what insurance would cover and if insurance didn't cover it all, who would pay for what. So, we want to get that hammered out. Those are details that we didn't think of in the first lease, so I think what JoAnne said is she would want to submit some language for your consideration on that one. Item No.8 - that was Item No.8. Item No.9 she wanted us to set if the indemnification goes beyond the term of the agreement; they want to set an outside date after which their indemnity would end. Thereby giving certainty that they wouldn't have to continue to carry insurance beyond a certain date. So, they will propose a specific on that. Again, these are the things that JoAnne is doing her job representing them by asking for these things and so far there is nothing that I don't think we can't work out. Item No. 11 if there are items where the city's consent is required they want to include a term that the city will not unduly withhold condition or delay that consent. Again, that's a standard term that we can add that in if you don't find objection to that. Item No. 12, we have included items for liquidated damages in the event that they don't do what they are supposed to do in terms with maintenance and operations. The penalties as proposed were $250 per day for operations and $500 in connection with maintenance and JoAnne is just asking whether her client thinks that's reasonable. We haven't heard from them, but that might be a condition that we continue to address and the reason that we put in liquidated damages is if the city has to step in and take over these things, we don't want to have to fight about how much it is costing us down the road. We want to agree up front that if the city has to go in and mow the lawn and run the clubhouse that those were what we would think it would cost us to do that in order to keep that facility open for the public. So, those are the 12 items that were raised by their attorney. Bird: Item No. 10? Meridian City Pre-Councii Meeting April 26. 2005 Page 4 of 16 Baird: Oh, Item No. 10; they wanted time for the insurance agent to review the insurance provision. And I can - this is an email that Ms. Butler gave to me, I can certainly provide that to you if you would like to see that in writing. I tried - it was a page worth of small print that I tried to summarize here for you here on the record. So, with that, I think that concludes the comments that I have and I will stand for questions at this point. De Weerd: Council, do you have any questions? Bird: Madame Mayor. De Weerd: Mr. Bird. Bird: Do you want to explain this contingent consent to assignment of lease to - for the public? Baird: I can certainly do that and I have got a couple extra copies if anyone is interested. It's starts out by indicating that the existing lease with Cherry Lane Recreation is in effect and there has been a request to assign that lease to joint tenant operators that have currently been identified as Lake View Meridian Investors, LLC and the Boise Ranch Golf Course. The city has a term in the existing lease that allows us to give our consent to any assignment of the lease. We have been in negotiations with the proposed new tenant and again, that's the document before you tonight and we are moving towards asking you to give consent to that lease and the original plan, of course, was to have that all in one document. Given the concerns that have been raised tonight or today by the attorney for the new operator, we just don't think it's possible to make those - Ms. Butler was not available today to sit down and hammer it out, so rather than putting this to a halt and kicking these people off the premises, what the consent does is it says you agree to assign the lease from the former operator to the new proposed operator for a temporary period, their occupancy will be only temporary and can be terminated if they don't deal diligently with us to complete the agreement, consistent with what's been published, but in addition to address the attorney's concerns or any public concems. So, it makes the (inaudible) contingent and it also makes it revocable, but it also sets forth the - puts on the record of the standards that we have discussed. There is an exhibit that talks about the grounds maintenance standards and in essence it says that the city, if the agreement doesn't come back with those in it, that you are not going to approve the assignment. It's also saying that in order for them to meet those maintenance standards about keeping the grass green, keeping it weed free, keeping it cut - they are going to have to show you how they are going to achieve that through the Capital Improvement Plan, you are going to want to see that. Again, it's setting forth what you expect to see, but allowing them to move forward to continue to operate and basically just get started out there. Bird: Madame Mayor. Meridian City Pre-Council Meeting April 26. 2005 Page50f16 De Weerd: Mr. Bird. Bird: What's a fair date in May, Ted, for you? Baird: JoAnne Butler said that one or two weeks would do it. Bird: The 1ih, would that be okay? Baird: The 1 ih would work for the city and I think it would work for JoAnne Butler and we are getting nods from Lake View and Boise Ranch out there so the 1 ih might be a date you would want to consider. Bird: I just want to make sure we don't have to come back ten times to do this. Baird: Yeah, what we would like to do is, of course, the Thursday proceeding, whatever date you choose as the date we would like to have that in-house, so we could prepare it and have the Clerk publish the final agreement on the website by that Friday afternoon. Again, thereby giving the public the weekend and the first two days of the week to review that agreement and we don't anticipate having another public hearing on this. I want to make that clear, unless you feel the need and make the specific request. In fact, it's a little unusual to have a hearing on a lease, but you thought it was a good idea to get this out there and get the public's input, so it's been a good process, but again, any - the idea is to incorporate anything that's put on the record tonight and bring it back to you. De Weerd: Thank you, Ted. Any other questions? Would the representatives like to come forward and make comments? If you will please state your name and address for the record. Oas: My name is Eric Oas. My address is 517 Front Street, Boise, Idaho. Madame Mayor, City Council, I think we - first of all, we appreciate you allowing us to have an opportunity to speak this evening to you with regard to the update that Mr. Baird has presented. I think it is very safe to say that we don't see that there is - really that in the 12 items that our attorney has presented and based on discussions that we feel are ongoing, we don't feel that there isn't anything in here that can't be worked out. I think most of the items that you have heard from Mr. Baird involved cleaning up language, as you pointed out addressing things that probably should be spelled out pretty clearly. There are, if I could just hit a couple of the ones that I think that we would highlight - one is obviously the depreciation expense if at all possible, we would like to be able to utilize that especially in the event that - especially since the city can't benefit one way or another through the usage. We would prefer to retain ownership for that purpose. The 10 day cure period notice, we feel, is a little bit tight and in all the agreements that we typically negotiate for to be in default, it's a very tight timeline, particularly in the event that the issue that is putting on default is going Meridian City Pre-Council Meeting April 26, 2005 Page6of16 to require some work that takes more time. We would like the approach that Mr, Baird has presented, that if we are demonstrating some conscientious effort and moving forward then and exhibiting a good faith effort to get it resolved, then we would like to have some additional time there. The Item No.7, the broad language aspect of the claims issue we feel is probably a bit over reaching and I think part of it is that we are just trying to incorporate some issues that from another lease agreement that may not necessarily relate to this one. We have no problem, whatsoever having a reasonable reciprocal agreement with the city on claiming back and forth, but we would find it very difficult to relinquish any rights we may have in the future for any event that may come up. It just doesn't seem like it would work. I think beyond that, we would like to have an opportunity to, I guess, the last item, the liquidated damages issue, we would like to have some additional dialogue there to make sure that we come up with something that works both ways. I don't at this point - we would like to finalize our view of the document and make sure that there isn't anything else that our attorney didn't finish reviewinJ! at 1 :24 this morning and work diligently to get this wrapped up for you on the 17 . De Weerd: Is that double time? Oas: We told her that we wanted it high priority. I guess she took us at our word. So, with that I would certainly be open for any questions. De Weerd: Council, any questions? Mr. Wardle. Wardle: Madame Mayor. Eric you have seen and been involved in negotiations with the new maintenance standards for the course? Oas: Yes, I have - Dick is going to come up and talk specifically about some of the items in the lease that we probably ought to get on the record as well. He is more familiar with the maintenance standards. I am familiar with them, but not nearly the level that he is. Wardle: Okay, that would be my only question is whether you have reviewed and agreed to those and are willing to go forward with those current maintenance standards. Oas: I am sure Dick would be more than happy to come up and address that. De Weerd: Any other questions? Bird: I have none Mayor. De Weerd: Okay, thank you. Oas: Thank you very much. Meridian City Pre-Councii Meeting April 26, 2005 Page7of16 Davis: Madame Mayor, members of the Council I am Dick Davis. My home is at 7048 Chateau Moss in Boise, Idaho. I have been living at 4200 West Talamar for the last week in Meridian, Idaho. Just a few items in here, for the record, that we would like brought up. I already asked Will about the passes and he is going to get me the information on the passes that the city has, I guess, given to people. I just want to know how many there are and what restrictions they are and how long they go on for. I will get a Capital expenditure budget put together for you folks. We are so confident that this is going to get signed, I am probably going to order $300,000 worth of equipment this week. That will be the first (inaudible). We would ask that you consider for the six years that we are doing all these major capital expenditures, that you consider waving the $6,000 a year lease payment for us. We are putting a lot of money into this thing and that's one thing that we would ask that you maybe consider. Also, we would like to negotiate a little bit of a maximum on the lease amount after 30 years and it could be tied to inflation to whatever, but I think that there ought to be some cap on there so that the lessees 30 years from now, you know, don't get hit with a $250,000 a year lease, which the way the contract reads could happen. I would also and I don't - this probably isn't part of the lease agreement, but I think we at some time need to visit the 11 o'clock closure of the clubhouse. We plan on having a lot of weddings out there and evening weddings can go till 12 or 1 o'clock. You know, I have no problem making sure everybody is inside, you know, abiding by the noise ordinances, but one of our revenue generating activities out there is going to be weddings and an 8 o'clock wedding can go till 12 o'clock very easily. I don't certainly condone people running around in golf carts in the middle of the night, we can get them inside the clubhouse, that's the way we did it at the other place, they had an 11 o'clock noise ordinance and it seemed to work fine, we just moved everybody inside at 11 o'clock and just fyi, you probably will get asked, I signed a PO today for about $3,500 to spray dandelions Monday, so the dandelions are going to start dying. Are there any questions? De Weerd: Are there any questions, Council? Bird: Madame Mayor. De Weerd: Mr. Bird. Bird: Dick, on the payback, what if we just do it on like a $2,000 per hole. That way if one year, weather or something comes in, you could only get two and it would be $4,000. Is that --? Davis: That would certainly be agreeable with us. Bird: This is one Councilman that would be agreeable with that. De Weerd: That would be the city's good faith towards capital improvement. Meridian City Pre-Council Meeting April 26, 2005 Page8of16 Bird: Good faith because they are stepping into something that neither one of us had anything to do with, nor the previous owners to speak of which it wasn't well designed. Davis: Just a bad situation. Bird: Let's just put it on the table like it is. Is wasn't probably well designed. Wardle: Madame Mayor. De Weerd: Mr. Wardle. Wardle: Just for clarification from Ted. Is that something that the Council will handle at budget time as far as our - if Councilman Bird's suggestion is something that we agree with, could it be handled year to year at the budget --? Baird: Madame Mayor, members of the Council, Councilman Wardle, yes I think you could do it that way. We would probably want to see the capital improvements plan drafted in such a way that it would identify the number of holes per year so that you could peg it to something and each year you could budget "x" numbers of dollars contingent on them fulfilling that promise for that year and if it gets done then the dollars would flow accordingly. That is certainly one way you could handle it. De Weerd: Thank you. Baird: Madame Mayor. De Weerd: Yes, Mr. Baird. Baird: I have a question that I haven't had an opportunity to ask, or actually ask in an email that I haven't heard, but of the existing agreement on the first page, Item 2b says the name of the golf course shall remain the same unless otherwise approved. I know that there has been some discussion of a new name, but I might recommend that if you've decided on the name that you incorporate that in the next draft so that when the draft is approved, the new name is also approved at that time. Davis: Oh,okay, Ted, that's a point well taken. Yeah, we have decided on Lake View Golf Club. And I might add, Shaun, you ask of Eric about the maintenance requirements there and that's certainly no problem with us. We are mowing greens right now seven days a week with the limited equipment we have got. We are not getting Fairways mowed twice a week and we hardly are getting the rough mowed at all with the equipment we have got, but tomorrow Jacobson is bringing into three new pieces of equipment for us to demo and we are going to Meridian City Pre-Council Meeting April26,2005 Page 9 of 16 demo them all right. And they assured me that the delivery time is within a week on new equipment or on most of it. It'li be here shortly. De Weerd: Thank you. Okay, this is an opportunity for the public to comment, is there anyone who would like to comment? Please state your name and address for the record. Marguiluex: My name is Gordon Marguiluex. I live at 2040 North Interlochen Way in Meridian, Idaho and you have a handout that I gave you, which were some of the things that - I have to apologize, I didn't get a chance to go through the agreement too much, partially because I think and I have to thank JoAnne Butler because if she hadn't sent her message in and she wasn't an attorney, I think you would have approved it today. First of all, we will go real fast and you can answer these afterwards. Exhibit A, assumption of agreement - De Weerd: Mr. Marguiluex, you do have three minutes and we have had time to review it. So, if you want to highlight. Marguiluex: I want to find out in the old agreement, if they defaulted it went back the option to take over the golf course, payoff the debt was given to the city alone. Now under this here, they are going to use part of the golf course as collateral for a second and if they default, do the citizens of Meridian have to pay back the Lovetts for the second. We don't know how much that is. It's not in the agreement. It's a blank spot there. Item No.2, JoAnne already mentioned this, legal description capital projects is not on the form. This was done so quickly that even - there's two errors - there are two section fours. One on operation and one on payment of lease and I would like to know which one Mr. Davis is - because there is nothing for inflation in the current one. But, I do agree he is putting in a large investment, I think what we should do is cut him some slack, one dollar a year for the first six years and then 10 percent of the gross income after that. Let him put his money in there and invest it and I am willing to do that, plus make that 2 percent of that 10 percent go back to the golf course to reduce fees so we bring more people in. Section 4.2 restaurant and bar operating hours are not clear. They have a bar at the Boise Ranch Golf Course right now that can stay open until 2 o'clock and I don't want 2 o'clock because I am only about 300 yards from the golf course and I don't want to hear the thump, thump, thump of the music. So, I don't care about weddings. They can have weddings, they could do that and they could maintain it, but that it's it. Just to jump down to number six over here to general. This is vaguer than what we had before we were comparing it against golf courses. Now we have this thing called a (inaudible) level. All we have to do which is very subjective, there is nothing that says what the golf course criteria is, what level of US Golf Association that we have to meet and you can look at the rest of these here. Default, I should think that if they are going to have a default of ten days. If they don't want to have a default of ten days, they should at least submit a plan of what they are going to do. They don't have to fix it; they have to submit a plan within that ten days, And Meridian City Pre-Council Meeting Aprii 26, 2005 Page100f16 just if I had one second. I was called a liar last week when I mentioned the trash at Boise Ranch. I was told that there is no trash. There is a picture of the trash, not by people tossing wrappers. This is what the golf course puts out there and it's been there for a while because it has a lot of wear to it. This is what the gas tanks - I was called a liar last week because I told them that it was ten feet from the irrigation ditch. He said it was 50 feet. No, it's ten feet. Go measure it yourself. This is what the gas tank is going to look like. You back into one of these things here and it falls over and for some of you, (inaudible----) this is what the storage for hazardous chemicals and sprays is going to be. They have it stacked on a pallet, that's going to be in this thing that is ten feet away from the irrigation ditch. Thank you very much. If you want to answer those questions I will be listening. De Weerd: Okay. Thank you, Gordon. Any further testimony? No. Okay. Thank you. Mr. Baird, do you want to answer some of that? Baird: Madame Mayor, I will do my best. I think most of these concerns can be addressed or had been addressed. Item No.1, we merely attached the document that the bank was requiring and just to make it clear the lessee is not able to pledge the golf course land itself. They referred to that in the assumption agreement as the land of the real property, but it is defined as being the lease holds interest. So, those are standard banking terms. I have been in contact with the banker and we are not asking you to agree to anything that any other business wouldn't be engaging in. I don't know the amount of the carry back note, they left it blank. If you think it's important, I will request that we get that number and have it inserted, I presumably left it out for confidentiality, so I'll seek your direction on that. Item No.2, legal description was indeed included on the website, it just wasn't immediately behind what was identified as exhibit b, it was at the very, very end of what is on the website. It's quite lengthy; in fact, it's like seven different parcels in about an eight page legal description. The plans for the expanse for the restaurant and bar we have asked them to share those with us when they have them and the city would have to approve them through the normal approval process. Item No.3, the clubhouse is subject to conditional use permit that's referenced in the agreement on page four it's CUP 99-009 and it states that the clubhouse operations other than maintenance shall conclude daily on or before the hour of 11 o'clock. If the new operator wants those changed they will have to come in and request an amendment of the CUP. With regard to maintenance going beyond 11 o'clock it would be no different than anybody else and again, I think we would have to look back on what people do in their own yards with their lawn mowers and noise ordinances. It's not specifically set out in the CUP, it's not limited through the hours of the clubhouse and I think that was probably giving the operator the benefit of the doubt that sometimes in dates when the sun goes down at eleven or you know ten o'clock or 10:30 and comes up early that they might need to be doing some mowing in the dark to keep the greens in good condition. Item No.4 I just addressed Item No.4. Item No.5, we will fix the section numbers that were miss numbered in just a formatting error in Meridian City Pre-Council Meeting ,April 26. 2005 Page 11 0116 word that they made some changes at the last minute and it through everything off, so we will get that fixed. Item No.6, the maintenance requirements, we think that by linking up those aesthetic requirements with the specifics that are listed in exhibit "d", that it gives you sufficient control. It also allows us to go back and reopen and renegotiate, if we don't think it's being met. So, if anybody, Mr. Marguiluex included has a specific about what they would like to see, send it forward if you think it's too vague. Talking with them, looking at what other courses uses their standards and we think that by linking both a USGA or any golf associations they have specific standards, they don't have a, b, c or d levels, they just have a level and then by linking that with very specific items that we list in the exhibit and we think that we covered. Item No.7, asking about whether a $1,000 liability is enough. The city's liability is limited by the tort claims act of $500,000 so actually the $1 million liability that we are asking for protects the city, twice the amount that would be required under statutes; so if they believe that a million dollars would not be enough, they can review that with their own insurance agent, but there is no reason for the city to require any more than $500,000 or sometimes what we do is we say or as amended and if the legislature ever raises the tort limits claim acts limit beyond the $500,000 they would automatically be required to up their coverage, but it's kind of - well, I was about to say it's beyond the realm of possibility within the next thirty years that they would raise that beyond $500,000, but 30 years is a very long time. So, what I would propose that we do to address that rather than putting that at a million, insert a term that you probably seen before like I just said that states that if the legislature raises the cap, that they will buy insurance to fulfill that within an "x" number of days after the lobbying enacted and I think that that would protect the city. Item No.8, I am not sure what he is getting at about the default provisions. We have tried to link any requirement that we are asking of them, we tried to link that to "b" in event of default, so we will take a look at that and if indeed it is not sufficiently linked to make any failure on their part of default we will make sure that it is. So, I appreciate the additional review and there are a couple of things that we can certainly address there. De Weerd: Okay, any final comment? Donnell: Madame Mayor. De Weerd: Ms. Donnell. Donnell: Mr. Marguiluex, did I say that right? Did you provide the pictures to Mr. Davis as well as to us? De Weerd: Mr. Marguiluex will you come to the microphone? Marguiluex: No, I did not. I gave all my copies to the City Clerk. Meridian City Pre-Council Meeting Aprii 26, 2005 Page 12 01 16 Donnell: I think it fair that he has a copy of the pictures that you have taken to Boise Ranch, so if you would give those to Mr. Davis, please. Thank you. De Weerd: Mr. Wardle? Okay, if there is no further comment. Howell: My name is Millard Howell. I live at James Place, 4525 West Neblic at James Place in Meridian and comments -- I have very little knowledge of what's taken place here, but comments made tonight I am wondering does the City Council get involved in signing any notes, securities for this transaction to take place or down the road when we get involved with law suits. I have heard what the previous lease was and what the charge was and I could not believe it. I just would hope that that doesn't take place again because there is money to be made out there and there are improvements to be made and the first improvement is the dandelions and I represent several homeowners that have had problems with dandelions and continue to have problems and we want them taken care of as quickly as possible. De Weerd: I guess I would ask our attorney to maybe respond, but this is not a new lease. They bought the lease that we are currently under. They purchased it from - Howell: They are just getting City Council approval then? De Weerd: Yes. We have to approve the transfer of the lease, but through that transfer we have asked them to incorporate specific standards because the former lease or the lease that they bought was very vague and we are trying to have clearer expectations, so everything is on the table, so the price that they pay annually does not change. They bought that lease for substantial money; in addition they will have substantial capital outlay to bring that golf course up to standards. Howell: Do we have a figure on that? Do we say what they are going to spend capital wise each year? De Weerd: Mr. Baird. Baird: Madame Mayor, members of the Council that's why we are asking for a capital improvements plan and six year plan and we are not asking for them to say what they are going to spend, but we are asking them to tell us what they intend to do and we have asked them to do that with a level of specificity so that it'li be guaranteed that what's going in there will be a quality product. Madame Mayor, if I could add on to what you said, we have just taken this opportunity to add additional items to the lease in the form of an amended lease to further protect the city, the public, the residents who live out there by adding some additional terms, so it is indeed - the existing lease, we are incorporating that, we are adding to it for the benefit of everybody and to address to your first question Meridian City Pre-Council Meeting April 26. 2005 Page 130116 the city is not getting involved with any financing, we are not obligating, in fact, we are prohibited from lending the city's credit by the Idaho Constitution. The only thing that we are doing with relationship to the bank loan is listed on the first page of the document. All we are doing is consenting to the assumption of the existing obligations that we have already agreed to. We are allowing them or consenting with them to be assumed by the new operator. Again, a standard term on any transaction where a business is being bought or sold. Howell: We were at a meeting earlier tonight and comment made by one of the people at the meeting was that they had a son that was playing out there as through the school system and they have been paying $5 a piece to play, to learn how to play golf. Now, they are getting charged $13. Now, was there anything in the agreement that way? Was that the change or --? Baird: Madame Mayor. De Weerd: Yes, Mr. Baird. Baird: The original lease agreement did not include any terms on what could be charged. The idea was that we are giving this facility to a private operator, or not giving it but leasing it for a number of years and I think that same concept applies to the new operator - that they are taking a risk, a business risk and that for the city to impose it's terms on what should be charged - at the time that this lease was entered into it didn't seem appropriate and we haven't readdressed that at this point and I think one of the things is is that the city just doesn't have the staff, the time to monitor that. We have included in there the request they continue a youth golf program, we are just kind of hoping that the market will dictate how that works. We can certainly encourage scholarships, we can encourage other kinds of programs, the Parks and Recreation Department, but it has not been incorporated as a term of the lease. Howell: Okay. De Weerd: Okay, thank you. Did you have any comment, Mr. Davis? Davis: Yes, Madame Mayor, members of the Council to address the rates, I don't really know where that came from because the high school kids that are on the high school team play for nothing and they always will. They do come out and pick up balls for us in exchange for their golfing privileges, they get (inaudible) privileges, they get free range balls and they get free golf if they are on the high school program, so I really don't know where this came from. I think somebody maybe gave you some bad information. Howell: That could be (inaudible-------------------). Meridian City Pre-Councii Meeting Aprii 26, 2005 Page 140116 Davis: I don't know where it came from because we don't have a $13 fee for one thing and the high school kids play for nothing. (Inaudible discussion---------------------------------) Donnell: Madame Mayor. De Weerd: Ms. Donnell. Donnell: Mr. Davis and Mr. Howell that is probably a high school increased fee for them to be part of that program. So that's just a guess that it's probably an increase in the high school fee. Davis: Oh, that could be at the school level. That could be. But, I know that the kids were out there tonight and that guy said there were 25 of them probably hitting golf balls. Here again, I have ordered 1,200 new range balls because we don't have enough. We ran out and the kids went and picked them up and brought them back and hit some more. They don't pay. The kids don't. De Weerd: Well, Mr. Davis we are thrilled that you will be spraying dandelions. The yellow is beautiful, but we know what it means. Davis: Monday is the day they are scheduled to spray, so, like I said - De Weerd: Okay, if there is no further discussion, I will close the public hearing and we don't need any action on this item. De Weerd: But I will go ahead and move to Item No.4, which is the resolution number and we will have to table that to May 1 ih? Baird: Madame Mayor, members of the Council if that is the date that you would like to see that, we can continue that item and insert that into the assignment document that is before you. De Weerd: And then put the new one in that place? Baird: Correct. Bird: Madame Mayor. De Weerd: Mr. Bird. Bird: I move that we table the resolution until May 17, 2005 and to allow them to get started legally, I would move that we approve the contingent consent to assignment of lease and for the Mayor to sign and the City Clerk to attest. Meridian City Pre-Council Meeting April 26,2005 Page 150116 Wardle: Second. De Weerd: Okay, the motion is to table the resolution to May 1 ih and to approve the contingent as presented before you. Is there any further discussion, Mr. Bird? Bird: Mayor in that motion on the consent it also - that expires the 17th, so -- (Tape turned over) Bird: (inaudible -) resolution and it goes away. Wardle: Second. De Weerd: Is there any further discussion? Mr. Berg, will you please call roll. Roll Call Vote: Bird, aye; Wardle, aye; Donnell, aye; Rountree is absent. De Weerd: Thank you. Now, I am assuming the information you need from our City Clerk, was that requested when we had the public process a couple of weeks ago? Baird: It was requested tonight Madame Mayor. De Weerd: Oh, okay, so Mr. Berg will get in touch with you and let you know when he might have that. Mr. Berg do you have an idea of what kind of process that will take to pull together? (Inaudible discussion ----------). De Weerd: I will try and get mine in real quick. Thank you. I would go ahead and close the special meeting. Motion to adjourn? Bird: Madame Mayor, I move we adjourn the special meeting. Donnell: Second. De Weerd: All those in favor say aye. ALL AYES. MOTION CARRIED. Meridian City Pre-Council Meeting April 26. 2005 Page 160116 Item 4. Resolution No. : Assignment of Lease and Amended Lease Agreement for the Golf Course: MEETING ADJOURNED AT 7:21 P. M. (TAPE ON FILE OF THESE PROCEEDINGS) APPROVED: ~~ os / 24 / OS DATE APPROVED