Loading...
HomeMy WebLinkAboutR-2004-198 Revised Yakima Valley Farm Workers Clinic AgreementRESOLUTION NO. R-2004- 198 A RESOLUTION authorizing the City Manager of the City of Yakima to execute a revised Operating Agreement with the Yakima Valley Farm Workers Clinic for the purposes of operating the former Yakima Senior Center located at 602 North Fourth Street, Yakima, Washington, as a neighborhood facility to meet the needs of youth and families in the greater Yakima area. WHEREAS, the City is the owner of the former Yakima Senior Center ("Center"), located at 602 North Fourth Street; and WHEREAS, the City desires that the Center be managed, operated, and maintained as a neighborhood facility in order to meet the needs of youth and families in the greater Yakima area, including but not limited to structured recreational and academic activities for youth, family enrichment services, and behavioral health services for community members; and WHEREAS, the Yakima Valley Farm Workers Clinic, in conjunction with the Northwest Community Action Center ("NCAC") and the Yakima Police Athletic League ("YPAL'), proposed to operate the Center as a neighborhood facility for said purposes; and WHEREAS, the City Council Economic Development Committee reviewed the proposed use of the Center with representatives of NCAC, YPAL, and the Yakima Valley Farm Workers Clinic and recommended that the City enter into an Operating Agreement with the Yakima Valley Farm Workers Clinic; and WHEREAS, on June 22, 2004, the City Council passed Resolution No. 2004-83 that authorized execution of an Operating Agreement with the Yakima Valley Farm Workers Clinic; WHEREAS, the Operating Agreement that was approved by the City Council contained a requirement that the Yakima Valley Farm Workers Clinic have and maintain a general liability insurance policy on an "occurrence" coverage basis (as opposed to a "claims made" coverage basis), and that the policy be issued by an insurance company rated A -IX in Best's Guide; and WHEREAS, the general liability insurance policy of the Yakima Valley Farm Workers Clinic does not meet said criteria as it is on a "claims made" coverage basis and the insurance company that issued the policy (Washington Casualty Company) is in receivership and is not rated in Best's Guide; and WHEREAS, approximately 2 years ago the Washington State Insurance Commissioner assumed control of Washington Casualty Company; and WHEREAS, on September 29, 2004, Insurance Commissioner Mike Kreidler issued a letter to the City of Yakima in which he reassured the City of the status of Washington Casualty Company and urged the City to accept the general liability insurance policy issued by said carrier; and WHEREAS, the Yakima Valley Farm Workers Clinic has also offered its general excess liability policy as additional insurance coverage in the event of a claim above $1 million; and WHEREAS, attached hereto is a revised version of the Operating Agreement in which the general liability insurance requirements have been modified and an excess liability insurance requirement has been added to reflect the above circumstances; and WHEREAS, the City Council deems it to be in the best interest of the City to authorize execution of the attached Operating Agreement with the Yakima Valley Farm Workers Clinic, now, therefore, BE IT RESOLVED BY THE crrY COUNCIL OF THE CITY OF YAKIMA: The City Manager of the City of Yakima is hereby authorized and directed to execute the attached revised "Operating Agreement" with the Yakima Valley Farm Workers Clinic for the purposes of operating the former Yakima Senior Center located at 602 North Fourth Street, Yakima, Washington, as a neighborhood facility to meet the needs of youth and families in the greater Yakima area. The City Attorney shall approve the final form of the Agreement. ADOPTED BY THE CITY COUNCIL this 14th day of December, 2004. ATTEST: Paul P. George, Mayor City Clerk YAKIMA YOUTH CENTER OPERATING AGREEMENT THIS AGREEMENT is made and entered into this.Z24) day of .e,/0, 2004, by and between the City of Yakima, a Washington municipal corporation (hereinafter "City"), and the Yakima Valley Farm Workers Clinic, a nonprofit corporation (hereinafter "Operator"). WITNESSETH: WHEREAS, the City is the owner of the Yakima Youth Center (hereinafter "Center"), which is located within the City of Yakima and is legally described as follows: Lots 1 and 2, Block 64, Town of North Yakima, now Yakima, as recorded in Volume "E" of Plats, Page 1, records of Yakima County, Washington; TOGETHER WITH the vacated right-of-way for East "F" Street. WHEREAS, the parties to this Agreement desire that the Center be managed, operated, and maintained in accordance with the provisions, terms, and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: 1. General Management Responsibilities and Expenses of Operator. The Operator shall manage, operate, and maintain the Center consistent with City policies and with the general concepts of a non-profit facility. Specifically, the Operator shall manage, operate, and maintain the Center as a neighborhood facility in order to meet the needs of youth and families in the greater Yakima area, including but not limited to structured recreational and academic activities for youth and family enrichment services for community members. Except as otherwise provided herein, the Operator shall, at its sole expense and cost, promptly pay all costs of administration, operational expenses, maintenance costs, taxes, overhead, utilities, and other fees relating to or arising out of the use of the Center. The Operator may also seek additional financial resources from private and public sources (e.g., private foundations, government grants) to pay these costs and donations for equipment, personnel, supplies and services to enhance the Youth Center operations. The City shall not be required to reimburse the Operator for any of the operational expenses or maintenance costs which the Operator is obligated to pay as provided above or for any capital improvements which the Operator may make to the Center pursuant to Section 4 below. The Operator agrees to perform the services contemplated by this Agreement in consideration of the community action benefits to 1 be derived hereunder; the City shall have no obligation to pay the Operator for said services. 2. Term of Agreement. The term of this Agreement shall commence at 12:01 a.m., July 1, 2004, and shall terminate at midnight, June 30, 2009, unless earlier terminated by either party in accordance with Section 24 of this Agreement. 3. Maintenance. The Operator shall keep the interior of the Center at all times in as good repair and condition as the same now is, ordinary wear and tear resulting from careful usage and damage by the elements without fault on the part of the Operator alone excepted. The Operator shall maintain and repair the doors, windows, and all interior walls and fixtures for the Center. In addition, the Operator shall be responsible for routine maintenance (costing $500 or less) of the heating and air conditioning (HVAC) system and the interior electrical and plumbing fixtures. The Operator shall also provide janitorial/cleaning services and sidewalk snow removal. The City shall maintain and repair the foundation, outside walls, structure, and roof and shall be responsible for major repairs (costing in excess of $500) to the heating and air conditioning (HVAC) system and the electrical and plumbing systems, at the City's expense. In addition, the City shall maintain and repair the landscaping, parking lot (including lighting and providing for parking lot snow removal) and the park grounds adjoining the Center. Notwithstanding any other provision of this Section, the City's obligations hereunder are expressly made subject to the annual availability of funds that have been appropriated by the Yakima City Council. Such appropriations involve the legislative prerogative of the City Council, and no assurance can be given that appropriated funds will be available in any particular year. In the event that the City is unable to perform its obligations under this Section 3 due to insufficient appropriations, the Operator shall have no obligation to perform such maintenance and repair obligations at its expense, nor shall it be responsible for any damage caused by the failure to do such maintenance and repair. 4. Alterations, Modifications and Capital Improvements. The Operator shall make no alteration, modification, and/or capital improvements to the Center building and surrounding property as legally described herein without the prior written consent of the City. Any such alterations, modifications, and/or capital improvements shall be made at the sole expense and cost of the Operator unless otherwise provided by mutual written agreement of the parties. 5. Leases and License Agreements. All leases for a term of twelve (12) months or more in duration for space at the Center must be in writing and consented to by the City Manager or his authorized designee, which consent shall not be unreasonably withheld. Short-term license agreements and leases (having a duration of less than twelve (12) months) will not require consent by the City Manager. All leases and license agreements shall be executed and performed in compliance with all applicable federal, state, and local statutes, laws, and ordinances. Within thirty (30) days after the execution thereof, the Center shall provide the City with written copies of all lease 2 agreements and license agreements for space at the Center. Every such lease or license agreement shall also contain a provision requiring the tenant or licensee to pay the full amount of leasehold excise tax, if applicable, in accordance with the requirements of RCW Chapter 82.29A, as now or hereafter amended. It shall be the affirmative responsibility of the Operator to collect the leasehold excise tax, if applicable, from all tenants and licensees in accordance with the provisions of RCW Chapter 82.29A, as now or hereafter amended, and to remit said taxes to the City Department of Finance and Budget on a monthly basis. 6. Lease and License Revenue. All payments received and revenue from Center leases and license agreements shall be handled and controlled by the Operator for operational expenses and managing of the Center. The Operator shall provide the City with a written financial report, on at least an annual basis, showing the amount of lease and license revenue received from all sources. All of the Operator's lease and license revenue information shall be compiled and maintained in accordance with generally accepted accounting principles. 7. Utilities. The Operator shall pay all charges for water, heat, lights, power, and any other utilities which may be required or used by the Operator in the use or operation of the Center and agrees to pay the same in a timely fashion and agrees to pay the same so as to prevent any lien or shutoff of service from occurring. Any deposits or other charges required by any entity furnishing such utilities shall be paid by the Operator. S. Taxes and Assessments. The Operator shall be solely responsible for compensating its employees and for paying all related taxes, deductions, and assessments, including but not limited to federal income tax, FICA, social security tax, assessments for unemployment and industrial injury, and other deductions from income which may be required by law or assessed against either party as a result of this Agreement. In the event the City is assessed a tax or assessment as a result of this Agreement, the Operator shall pay the same before it becomes due. 9. Independent Contractor Status of Operator. The Operator and the City understand and expressly agree that the Operator is an independent contractor in the performance of each and every part of this Agreement. The Operator, as an independent contractor, assumes the entire responsibility for carrying out and accomplishing the services required under this Agreement. Additionally, and as an independent contractor, the Operator and its employees shall make no claim of City employment nor shall claim against the City any related employment benefits, social security, and/or retirement benefits. Nothing contained herein shall be interpreted as creating a relationship of servant, employee, partnership or agency between the Operator or any officer, employee or agent of the Operator and the City. 3 10. Maintenance of Records, Annual Report and Inspections. a. The Operator shall maintain accounts and records, including property, financial, and program records, and such other records as the City may deem necessary to ensure proper accounting for all project funds and compliance with this Agreement, including a system of internal controls and accounting systems which conform to generally accepted accounting principles and auditing standards. b. All such records and documents shall be retained by the Operator and shall be available for inspection, audit and copying by City representatives and/or appropriate federal/state officials during the term of this Agreement and for a period of three (3) years following the termination of this Agreement. c. On or by the July 1, 2005 and July 1 of each year thereafter that this Agreement is in effect, the Operator shall deliver to the City an annual written report describing in reasonable detail for the previous year the Center's uses, operations, maintenance, capital improvements, and any other significant information relating to the Center. The annual report shall include a written financial operating statement prepared by the Operator in accordance with generally accepted accounting principles. Upon the City's request, the Operator shall provide such additional financial information as the City, in its sole discretion, desires to obtain relating to this Operating Agreement and all transactions pertaining thereto. 11. Access and Inspection. The City shall have the right at all reasonable times to have access to the Center property and to make inspections thereof, subject to giving the Operator one (1) day's prior notice thereof. City employees who may exercise such inspection right include but are not limited to police officers, fire inspection personnel, and code enforcement personnel. If any inspection demonstrates, in the opinion of the inspector, clear and present danger to the public, the Center, or those in attendance at the Center, the inspector, the Fire Chief, the Police Chief or other appropriate City official/officer may order the event or activity concluded and the Center vacated, at no risk or liability to the City, its public officials, officers, employees, and/or agents. The Operator shall not enter into any lease or license agreement respecting space in the Center without incorporating into such lease or license agreement a provision that contains the language of this provision regarding the City's right of inspection and authority to order an event or activity concluded and to vacate the Center. 12. Drug -Free Workplace. The Operator shall maintain a drug-free workplace in accordance with the Drug -Free Workplace Act of 1988 and 34 C.F.R. Part 85, Subpart F for grantees (defined in 34 C.F.R. Part 85, Sections 85.605 and 85.610). The Operator shall not permit any tenant and/or other party to possess and/or consume any illegal drug(s) at the Center and the surrounding property as legally described herein during the term of this Agreement. 13. Prohibition Against Possession and/or Consumption of Intoxicating Liquor. The Operator shall not permit any tenant or other party to possess and/or consume any intoxicating liquor, beer, wine and/or similar beverage/substance at the 4 Center and the surrounding property as legally described herein during the term of this Agreement. 14. Maximum Occupancy of Center. The Operator shall comply, and shall ensure that tenants comply, with maximum occupancy levels as set forth in the applicable provisions of the Yakima Municipal Code and in accordance with federal, state and/or local laws and regulations. 15. Securitv. Operator shall, at its sole expense and cost, provide security for the Center building and property to the satisfaction of the City, which security shall, at a minimum, include an automatic intruder detection system, and secure door and window locks. 16. Personal Property. The Operator shall be responsible for the possession, use, and maintenance of all personal property (including personal property of the City) located at the Center and shall take all reasonable steps to ensure that such personal property is not removed from the Center. An inventory of the City's personal property is attached hereto as Exhibit "A" and incorporated herein by this reference. 17. Non -Discrimination. During the performance of this Agreement, the Operator shall not discriminate in violation of any applicable federal, state and/or local law or regulation on the basis of race, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, selection for training, and the provision of services under this Agreement. This non-discrimination provision shall include but not be limited to the following: a. The benefits or services provided by the Operator at the Center; b. The rules, regulations, and/or practices established by the Operator for use of the Center; c. All lease and license agreements entered into by the Operator with respect to space in the Center; and d. The employment practice of the Operator at the Center, including but not limited to employment, promotion, demotion, transfer, recruitment, advertising, layoff, termination, rates of pay, compensation, and selection for training. The Operator shall not enter into any lease or license agreement respecting space in the Center without incorporating in such lease or license agreement provisions which will ensure that the use or occupancy of the Center, in the provision of neighborhood services and other benefits, will be available without regard to race, creed, color, national origin, religion, sex, marital status, age, or the presence of any sensory, mental, or physical disability. The Operator shall also furnish all information, 5 evidence, documents and reports required by the City to substantiate compliance with this non-discrimination clause. 18. Compliance with Applicable Laws. The Operator shall operate, maintain, and manage the Center in accordance with all applicable statutes, laws, regulations, and ordinances and shall not allow the Center to be used for any unlawful purposes. The Operator shall not commit any waste on the Center property nor damage same nor permit waste or damage by others. 19. Insurance Requirements. a. Property Insurance. The Operator shall procure and maintain a policy or policies of property insurance with respect to the Center covering ail property owned by the Operator including personal property and tenants' improvements and betterments. The Operator will hold the City harmless for any damage to property owned by the Operator and waive its right of subrogation for any damage to its property. b. Liability Insurance. On or before the effective date of this Agreement, the Operator shall provide the City an Acord certificate as proof of liability insurance in the amount of One Million Dollars ($1,000,000.00) per occurrence combined bodily injury and property damage that states who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Agreement. The policy shall name the City, its officers, elected officials, agents, and employees as additional insureds and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) days' prior written notice. The insurance shall be on a claims made basis. The insurance coverage shall remain in effect during the term of this Agreement and for a minimum of three (3) years following the termination of this Agreement. A copy of the policy shall be provided to the City upon request. c. Excess Liability Insurance. A. On or before the effective date of this Agreement, the Operator shall provide the City an Acord certificate as proof of excess liability insurance with a limit of at least five (4) million dollars ($4,000,000) per any one occurrence or wrongful act or series of continuous repeated or related occurrences or wrongful acts in excess of the Operator's underlying limit of one (1) million dollars ($1,000,000). . Said policy shall be in effect for the duration of this Agreement. The policy shall name the City, its officers, elected officials, agents, and employees as additional insureds and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) days' prior written notice. The insurance shall written with an insurance company rated A -IX in Best's Guide or companies approved by the City. A copy of the policy shall be provided to the City upon request. d. Industrial Insurance. The Operator shall comply with the provisions of RCW Title 51, Industrial Insurance. For the duration of this Agreement, the Operator 6 shall provide or purchase industrial insurance coverage for its employees, as may be required of an "employer" as defined in RCW Title 51, and shall maintain full compliance with RCW Title 51. e. Tenants must carry liability insurance. Unless otherwise authorized by the City Manager, the Operator shall require that all tenants of the Center maintain and provide proof of liability insurance coverage in accordance with Subsection b of this Section, including but not limited to the same level of coverage and naming the City, its officers, agents, and employees as additional insureds. f. City does not provide insurance for Operator. It is understood the City does not maintain any form of insurance for the Operator, its officers, employees, volunteers, and/or agents. It is further understood that the Operator is no obligation to maintain any form of insurance for the City, including the Center and the City's personal property contained therein, except as provided in this Section. 20. Indemnity. a. The Operator agrees to hold harmless, indemnify, and defend the City, its elected officials, officers, employees, agents, and/or volunteers from and against any and all suits, actions, claims, liability, damages, judgments, costs and expenses (including reasonable attorney's fees and disbursements) arising from the Operator's failure to perform or negligent performance of its obligations under this Agreement, and/or its negligent acts in connection with the operation and/or use of the Center. b. The City agrees to hold harmless, indemnify, and defend the Operator, its directors, officials, officers, employees, agents and/or volunteers from and against any and all suits, actions, claims, liability, damages, judgments, costs and expenses (including reasonable attorney's fees and disbursements) arising out of its negligent acts and/or its failure to perform its obligations under this Agreement. c. In the event that both the Operator and the City are negligent, each party shall be liable for its contributory share of negligence for any resulting suits, actions, claims, liability, damages, judgments, costs and expenses (including reasonable attorney's fees). d. Nothing contained in this Section or this Agreement shall be construed to create a liability or a right of indemnification in any third party. e. This Section of the Agreement shall survive the term or expiration of this Agreement and shall be binding on the parties to this Agreement. 21. Assignment. This Agreement, or any interest herein or claim hereunder, shall not be assigned or transferred in whole or in part by the Operator to any other person or entity without the prior written consent of the City. In the event that such prior written consent to an assignment is granted, then the assignee shall assume all duties, obligations, and liabilities of Operator stated herein. 7 22. Severability. a. If a court of competent jurisdiction holds any part, term or provision of this Agreement to be illegal or invalid in whole or in part, the validity of the remaining provisions shall not be affected, and the parties' rights and obligations shall be construed and enforced as if the Agreement did not contain the particular provision held to be invalid. b. If any provision of this Agreement is in direct conflict with any statutory provision of the State of Washington, that provision which may conflict shall be deemed inoperative and null and void insofar as it may conflict and shall be deemed modified to conform to such statutory provision. c. Should the City determine that the severed portions substantially alter this Agreement so that the original intent and purpose of the Agreement no longer exist, the City may, in its sole discretion, terminate this Agreement. 23. Non -Waiver of Breach. A waiver by either party hereto of a breach by the other party hereto of any covenant or condition of this Agreement shall not impair the right of the party not in default to avail itself of any subsequent breach thereof. Leniency, delay or failure of either party to insist upon strict performance of any agreement, covenant or condition of this Agreement, or to exercise any right herein given in any one or more instances, shall not be construed as a waiver or relinquishment of any such agreement, covenant, condition or right. 24. Termination. Either party may terminate this Agreement, with or without cause, by giving the other party thirty (30) days' written notice of termination. 25. Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the term or expiration of this Agreement and shall be binding on the parties to this Agreement. 26. Notices. Unless stated otherwise herein, all notices and demands shall be in writing and sent to the parties to their addresses as follows: TO CITY: Richard A. Zais, Jr., City Manager Yakima City Hall 129 North Second Street Yakima, WA 98901 TO OPERATOR: Juan Carlos Olivares, Executive Director Yakima Valley Farm Workers Clinic/NCAC 518 West First Avenue Toppenish, WA 98948 or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified mail, postage prepaid or hand delivered. Such notices shall be deemed effective when mailed or hand delivered at the addresses specified above. 8 27. Integration and Supersession. This Agreement sets forth all of the terms, conditions, and agreements of the parties relative to the subject matter hereof and supersedes any and all such former agreements which are hereby declared terminated and of no further force and effect upon the execution and delivery hereof. There are no terms, conditions, or agreements with respect thereto except as herein provided, and no amendment or modification of this Agreement shall be effective unless reduced to writing and executed by the parties. 28. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 29. Venue. The venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of Washington for Yakima County, Washington. CITY OF YAKIMA By: R. A. Zais, Jr City Manager Date: / a —I S- o `f ATTEST: YAKIMA VALLEY FARM WORKERS CLINIC Date: ia- a (-oy T ; ,� yl City Clerk City Contract No. Resolution No. I- -°° t 9 STATE OF WASHINGTON ) ) ss. County of Yakima ) On this day personally appeared before me to me known to be the ? X -Ak,=n . Nof Yakima Valley Farm Workers Clinic, the entity that executed the foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said entity, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute the said instrument. GIVEN UNDER my hand and official seal this &. day of v4-- , 2004. (44 Printed Name: (c<roi AIL,— Notary Public in and for the State of Washington, residing at '�r i'(i (o�ccn� My commission expires fru,,./ 1,0)o �� 1 10 SENIOR CENTER INVENTORY MAIN ROOM Desk -1 Chairs -2 Round Tables -7 Chairs -44 Microwave Coffee Pot w/3 Pots Burner Coffee Mugs -84 Counter Garbage Can MAIN ROOM EAST Folding Tables: Large -4 Small -4 Large Round Tables -2 Card Tables -18 Chairs -18 Racks -2 Sectionals -3 MAIN ROOM WEST Piano -1 Stools -2 Super Large Table -2 Large Table -1 Chairs -54 Screen w/Easel Big Podium Little Podium Front Woman's Rust -1 Paper Towel Dispensers -2 Soap Dispensers -2 Garbage Can EXHIBIT A FRONT DESK Desk Phone Phone Book Four Drawer Metal Cabinet -2 (Files) Cork Board P.A. System w/Access BACK ROOM Desk Phone Cork Board OFFICE 1 Chairs -3 Four Drawer Metal Cabinets Wood Storage Unit Phone OFFICE 2 Desk Four Drawer Metal Cabinets Phone Chairs -6 Paper Towel Dispenser OFFICE 3 Desk Phone Cork Board Chairs -3 Wall Storage Unit OFFICE 4 Desks -3 Four Drawer Metal Cabinets -2 (Files) Chairs -5 Wall Shelves -2 LAUNDRY ROOM Kenmore Washer (white) GE Dryer (yellow) Black Chair -1 CRAFT ROOM EAST Small Folding Tables -7 Chairs -16 Small Card Table -1 Plywood Board -1 CRAFT ROOM WEST Card Tables -2 Round Tables w/Rack-6 Large Folding Table -1 Chairs -52 Piano -1 American Flag -1 LOUNGE Cabinet Units -4 Book Shelves -4 Phone Wall Clock CONFERENCE ROOM Large Folding Table Cork Board HANDICAP BATHROOM Men & Women Hand Dispenser Soap Dispenser Garbage Can CLASSROOM Phone Broken Desk Gray Siding Metal Cabinet -5 Four Drawer Metal Cabinet -5 Printer Laser Computer Desks -3 Wall Mounted Fan White Board Cealing Fan Chairs -2 POOL ROOM Large Bench Small Bench Ceiling Fans -2 Pool Hanging Lights -4 Fire Extinguisher -1 Chairs -20 KITCHEN Sugar -30 Refrigerators -2 Freezer -1 Pots -9 Pitchers -4 Coffee Containers -7 Yellow Containers -2 Large Coffee Holders -3 Pepper Shakers -21 Salt Shakers -32 Stainless Steel Containers w/Lids-3 Stainless Steel Lids -3 Paper Towel Dispenser -1 Large Ladles —2 Knife Holder -1 Knives -7 Coffee Cups -11 Green Trays -47 Cutting Boards -3 Fire Extinguisher -1 Garbage Can Glass Pitchers -7 Coffee Cups -97 Eating Trays -59 Plates -126 Medium Bowls -32 Small Bowls -31 Small Plates -25 Small Plastic Cups -74 Large Steel Pots w/Lids-2 Medium Pot w/Lid-1 Pot w/Lid-1 Small Ladle -1 Misc. Towels Misc. Kitchen Utensils Small Blue Stool -1 Electrical Outlet White Baskets -15 Green Glass Trays -3 ENTRY WAY Fire Extinguisher -3 Chairs -5 Inventory conducted by Rey Garza and Jeff Brownfield of the Yakima Police Department, on June 1, 2004. MICHAEL l FINNEY F. JOE FALK, JR. ROBERT E. LAWRENCE-BERREY, JR. KEVIN S. NAUGHT LAW OFFICES OF FINNEY, FALK, LA WRENCE-BERREY & NAUGHT, PLLP STREET ADDRESS 117 NORTH THIRD STREET, SUITE 201 YAKIMA, WA 98901 MAILING ADDRESS POST OFFICE BOX 1586 YAKIMA, WASHINGTON 98907 December 9, 2004 Richard R. Zais Yakima City Manager City of Yakima 129 North Second Street Yakima, WA 98901 Re: Yakima Youth Center Operating Agreement Dear Dick: TELEPHONE 509-453-5604 FACSIMILE 509-457-7764 E-MAIL jfalk@fflaw.biz R(�,�Y F ' C�TI� QKIMA DEC 9 2004 OFFICE OF CITY MANAGER It is my understanding that you have requested a letter from me as legal counsel for the Yakima Valley Farm Workers Clinic explaining the reasons for the request by the Clinic that the insurance provisions in the above agreement be modified from those originally proposed. Under the terms of the originally proposed agreement, the Clinic would be required to maintain a liability insurance policy in the amount of $1 million per occurrence and name the City as an additional insured thereon. This requirement was acceptable to the Clinic. However, the agreement further provided that the insurance was to be on an "occurrence" form with an insurance company rated A -IX in Best's Guide. This requirement posed a problem. The Clinic maintains "claims made" liability coverage of $1 million through Washington Casualty Company (WCC). WCC has operated under the control of the state Insurance Commissioner, Mike Kreidler, as statutory receiver since March 2003. It therefore does not qualify as a Best's A- IX rated company. In addition, converting the "claims made" coverage to "occurrence" coverage was not an option. Richard R. Zais December 9, 2004 Page 2 The suggestion was made that the Clinic form a separate entity to operate the Youth Center and secure separate occurrence coverage for its operations through a Best's A -IX rated company. The Clinic inquired as to the availability and cost of such coverage and was advised that the annual cost would be $3,486. This represented a significant additional expense which the Clinic had not anticipated incurring when agreeing with the City to assume responsibility for operating the Center. At about the same time, Mr. Kreidler wrote you on September 29 to describe WCC's current circumstances and his prognosis for its future recovery. He identified other state, county and municipal agencies which have agreed to allow for their regulated entities to maintain liability coverage with WCC notwithstanding that it is not "A" rated insurer. He urged that the City permit the Clinic to provide liability coverage through WCC. In light of the foregoing circumstances, the Clinic took the understandable position that the operating agreement should be revised to allow for it to satisfy the insurance requirement through its existing coverage. Paul McMurray has drafted proposed modifications to the agreement that would allow for this with certain additional stipulations. I have provided the modified provisions to the Clinic, including its insurance representative. We are all in the agreement that the modified provisions are acceptable and urge that they be approved by the City Council. in my numerous communications with the Clinic over the past several months regarding its role in operating the Youth Center, I have heard nothing but positive comments about the opportunity which this provides the Clinic to serve the youth of our community. I believe that it would be fair to say that the Clinic views this as an excellent opportunity to partner with the City in meeting the needs of our youth, particularly our disadvantaged youth. It should be viewed by all concerned as a win-win situation. Richard R. Zais December 9, 2004 Page 3 Please let me know if you require any further assistance from me. Very truly yours, FINNEY, FALK, LAWRENCE-BERREY & NAUGHT, PLLP /0-‘' F. Joe Falk, Jr. FJF/dh cc: Carlos Olivares Dale Copeland SEP -?0-04 FRI 8:34 AM INS, COMM CO, SUPERVISION • MIKE KREIULER STATEINSUI+„Nr,( CCMI.41:•.i?IJEr Dick Zais, City Manager City of Yakima 129 North 2nd Street Yakima, Washington 98901 FAX NO, 360 5862022 P 2 STATE OF WASHINGTON OFFICE OF iNSU..IRANCE COMMISSIONER September 29, 2004 Re: Washington Casualty Company Dear Mr. Zais: v;,• .300) -70410 Thank you for allowing city staff to take time to discuss with my staff the City of Yakima's preliminary considerations about allowing Yakima Valley Farm Workers Clinic to provide liability coverage through Washington Casualty Company (WCC) for its proposed Yakima Youth Center operating agreement. I know the city has many factors to consider before making a final decision. I sincerely hope that when all the issues have been considered, the City of Yakima will allow Yakima Valley Farm Workers Clinic to provide liability coverage from WCC I assumed control of WCC as statutory receiver in March 2003 because of adverse financial indicators. My staffs analysis indicates that WCC's condition was caused primarily by its attempt to compete in a market in which it had no expertise, by undercutting prevailing market premium levels. WCC recognized that error and withdrew from that market, but the damage had already been done. WCC's remaining business is profitable, but recovery will take some time. In the twenty-one months since I assumed control of WCC, more than $1.3 million has been cut from expenses through new lease agreements, revised service contracts, and reduction in staffing levels. WCC's combined operating ratio is now about 70 points lower than when we arrived. Because of changes made at WCC since receivership was instituted, the Idaho Insurance Commissioner agreed to amend her restriction on WCC's certificate of authority and allow WCC to renew outstanding policies in that state. Earlier in the receivership, the Washington Health Care Facilities Authority, the Department of Social and Health Services, the Washington State Auditor's Office, the City of Seattle, and King County raised concerns about continued liability coverage by their regulated entities through WCC. Each was relying on guidelines that required their regulated entities to procure liability coverage only from "A” rated insurers. My office provided information to these agencies and discussed WCC's situation. Each agency agreed to allow its regulated entities to renew liability coverage with WCC. Some of the information provided and discussed with the state agencies was the fact that they had allowed their regulated entities to purchase liability coverage for a number of years even though WCC had never attained an "A" rating from A.M. Best. Of the domestic insurers who at one time wrote liability coverage for clinics and hospitals, only WCC continues to write that coverage. Many of the larger, better known insurers are no longer writing liability coverage for Mailing Address: P,o, t3ox 40255 •Olympia, WA 98504.0:=':• Street Address: 5000 Capitol Blvd. • Turnwater, WA 9850 I SP -30-04 FRI 8:34 AM INS, COMM CO, SUPERVISION FAX NO, 360 5862022 P 3 OFFICE OF INSURANCE COMMISSIONER Dick Zais September 29, 2004 Page Two clinics and hospitals. Observations by my office indicate that insurers that continue to write liability coverage for clinics and hospitals have raised their rates significantly. I have received some reports that this type of liability coverage may only be available in the unregulated surplus lines market. After the receivership, some insureds sought liability coverage elsewhere. Since the beginning of the receivership, WCC was able, however, to renew about 80-90% of its policies. (For 2004, that renewal rate has been 100%.) Some of the insureds that moved are now considering returning to the WCC fold (four have returned in 2004) and others are requesting quotes. Insureds that stayed with WCC and those that want to come back tell us that WCC's customer service and risk management services cannot be matched by any other insurer. Since receivership, WCC's claim inventory has been reduced by about 100. Most of the claims are originally below, or are settled below, the $300,000 level which would be paid by the guaranty association if WCC was liquidated, (Guaranty association protection would not be available if coverage was provided through a surplus lines insurer.) I don't believe it will be necessary to liquidate WCC or rely on guaranty association payments. WCC has continued to pay claims on a timely basis and cash flows, at current levels, are projected to pay all claims and allow complete rehabilitation of WCC. The Yakima Valley Farm Workers clinic Is an important element of health care delivery, as are the other rural clinics and hospitals that provide direct primary care. Many of those clinics and hospitals are insured by WCC. Those direct patient care facilities might not be able to find affordable liability coverage if I am forced to liquidate WCC. Without liability coverage, many of those facilities will be forced to close their doors, leaving huge gaps in our health care delivery system. My staff's current assessment is that the greatest danger to WCC's continued viability is non -renewals, not claims levels. 1 hope that the City of Yakima will be able to permit the Yakima Valley Farm Workers Clinic to provide liability coverages with WCC. If you need other information, please do not hesitate to contact Jim Odiorne at 360-725-7214. Mike Kreidler Insurance Commissioner cc: Paul McMurray, City Attorney City of Yakima - Police/Legal Center 200 South 3rd Street Yakima, Washington 98901 by fax: 509-575-6101 ITEM TITLE: SUBMITTED BY: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of 12/14/2004 Resolution authorizing execution of a revised Operating Agreement for the former Senior Citizen Center, 602 North Fourth Street, Yakima. Chief Sam Granato, Police Department Paul McMurray, Asst. City Attorney CONTACT PERSON/TELEPHONE: Paul McMurray (575-6030) SUMMARY EXPLANATION: The Yakima Senior Center, located at 602 North Fourth Street, was vacated with the opening of a new Senior Center in May 2004. The Yakima Valley Farm Workers Clinic, in conjunction with the Northwest Community Action Center ("NCAC") and the Yakima Police Athletic League (" YPAL'), offered to manage, operate and maintain the Center as a neighborhood facility in order to help meet the needs of youth and families in the greater Yakima area. The Council on Economic Development Committee met with representatives of NCAC, YPAL and the Yakima Valley Farm Workers Clinic and supported the concept of the Center's being utilized as a facility for providing community services for youth and families. -Continued on Page Two - Resolution X Ordinance Contract X Other (Specify) Funding Source APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt resolution authorizing execution of revised Operating Agreement with Yakima Valley Farm Workers Clinic. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Page Two On June 22, 2004, the City Council passed Resolution No. 2004-83 that authorized execution of an Operating Agreement with the Yakima Valley Farm Workers Clinic. The Operating Agreement approved by the City Council contained a requirement that the Yakima Valley Farm Workers Clinic have and maintain general liability insurance policy on an "occurrence" coverage basis (as opposed to a "claims made" coverage basis), and that the policy be issued by an insurance company rated A -IX in Best's Guide. The general liability insurance policy of the Yakima Valley Farm Workers Clinic does not meet said criteria as it is on a "claims made" coverage basis and the insurance company that issued the policy (Washington Casualty Company) is in receivership and is not rated in Best's Guide. Approximately 2 years ago the Washington State Insurance Commissioner assumed control of Washington Casualty Company. On September 29, 2004, Insurance Commissioner Mike Kreidler issued a letter to the City of Yakima in which he reassured the City of the status of Washington Casualty Company and urged the City to accept the general liability insurance policy issued by said carrier (a copy of said letter is attached). The Yakima Valley Farm Workers Clinic has also offered its general excess liability policy as additional insurance coverage in the event of a claim above $1 million to help address the situation (a copy of a December 9, 2004 letter from the Clinic's attorney Joe Falk is attached). Attached hereto is a revised version of the Operating Agreement in which the general liability insurance requirements have been modified and an excess liability insurance requirement has been added to reflect the above-described circumstances. The City Council is respectfully requested to adopt the attached resolution authorizing execution of the revised Operating Agreement with the Yakima Valley Farm Workers Clinic for said purposes.