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Home My WebLink About11/06/2012 08 City On-Site Clinic; Sunfair Building Lease Agreement BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: November 6, 2012 ITEM TITLE: Resolution authorizing lease agreement with Sunfair Professional Associates, LLC, for city on -site clinic SUBMITTED BY: Tony O'Rourke, City Manager Cheryl Ann Mattia, Deputy HR Manager Randy Tabert, Chair, Employee Welfare Benefit Program Board CONTACT PERSON /TELEPHONE: Cheryl Ann Mattia 509.249.6868 SUMMARY EXPLANATION: See attached • Resolution X Ordinance Other (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Phone: Source: APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ memo ❑ RESO ❑ Lease proposal • MEMORANDUM TO: Honorable Mayor and Members of the Yakima City Council FROM: Tony O'Rourke, City Manager DATE: November 1, 2012 RE: On -site health clinic recommendation Over the past year the Employee Health and Welfare Benefit Board has been researching the idea of having ah on -site clinic to contain the City's escalating health plan cost. This year we are projecting a $1,050,000 or 13.4% increase in the City's health care costs. The City's health plan consultant assisted the board in looking at three providers locally and out of the area. Based on cost, services provided, as well as other successfully operated clinics, the board recommended to the city manager the MiCare Clinic which is associated with our current third party administrator EBMS. MiCare will provide the City of Yakima: • Convenient, physician staffed primary -care health clinic at no cost to the employee and • their dependents • Generic prescriptions will be dispensed directly from the clinic at no cost to the employee and their dependents • Lab work will be available on site at the clinic at no cost to the employee and their dependents • Integrated billing and on -line scheduling is available with our current miBenefits.com By opening an on -site primary -care clinic, the plan could save approximately $362,000 in 2013, and potentially more in the future. Most of the savings are achieved by reducing physician office visits, prescriptions, and lab test costs. The implementation year (2013) will provide less savings due to start up costs to staff and supply the clinic with necessary furniture, medical supplies, etc. After the board approved going forward with an on -site clinic, finding the best location was the next task. The goal was to provide off -site and on -site options that would appeal to the employees with regards to location, easy access, and parking. The board reviewed five location options and after discussion and feedback from members and their groups, decided to recommend the Sunfair building on 3 Street. This location is approximately 10 minutes or less from all City facilities and has easy access through town and from the freeway. The Sunfair Building has agreed to a 3 -year lease term, at $10.00 per square foot, and will contribute 25% of the cost for tenant improvements. The annual lease will cost approximately $21,000. The City will also contribute approximately $11,500 for tenant improvements. Based on City Council approval, the MiCare clinic at the Sunfair building could open by February 1, 2013. This clinic will be one of several cost containment strategies needed to contain our legacy health care costs. RESOLUTION NO. R -2012- A RESOLUTION authorizing the City manager to negotiate, execute and administer a commercial lease agreement with owner and owner's agents for office space within the Sunfair Building. WHEREAS, the City of Yakima (City) is exploring various means to achieve cost savings in the provision of health care services for its covered employees and dependents, which means and methods will also increase the efficient provision of such services; and WHEREAS, the City has conducted a study of its existing facilities and has determined that current facilities do not provide suitable space to accommodate development of a conveniently located health care service center that preserves the confidentiality needs of patients seeking medical services; and WHEREAS, Sunfair Professional Associates, LLC owns and operates professional and commercial property commonly known as the "Sunfair Building," located within the 100 Block of South 3rd Street, Yakima, Washington, which building contains available space suitable to accommodate the City's intended service center; and WHEREAS, the City has discussed possible lease provisions for space within the Sunfair Building with owner and owner's agents, and have tentatively identified certain 111 terms of such potential lease agreement; and WHEREAS, the City Council finds and determines that the City Manager should be authorized to negotiate terms of a commercial lease with the owner and its agents for suitable space within the Sunfair Building, substantially conforming to the terms and provisions set forth in the "proposal" attached hereto and incorporated herein by this reference, or such other terms and provisions deemed to be in the best interests of the City; and WHEREAS, notwithstanding the above authorization, the City Council finds and determines that such terms and conditions of any lease agreement negotiated by the parties should include a provision authorizing early termination of such lease to accommodate any future need of the City to relocate its service center to its own facilities or other location; therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: 1. The City Manager is hereby authorized to enter into negotiations for a lease of suitable space within the Sunfair Building, with terms and provisions substantially conforming to the terms of the Proposal attached hereto, or such other terms and provisions deemed to be in the best interest of the City of Yakima. 2. In addition to the terms of the attached Proposal, the City Manager is hereby authorized to negotiate a provision authorizing early termination of such lease to accommodate any future need of the City to relocate its health service center or other use from the Sunfair Building to its own facilities or other location. 3. In the event a lease agreement is negotiated by and between the parties substantially conforming to the terms and provisions authorized herein, the City Manager, upon approval by the City Attorney of such agreement as to form, is hereby authorized to execute and administer such lease agreement; now, therefore, ADOPTED BY THE CITY COUNCIL this 6 th day of November, 2012. ATTEST: Micah Cawley, Mayor City Clerk • October 18, 2012 • City of Yakima RE: Lease space at the Sunfair Building in Yakima, WA To Whom It May Concern: On behalf of the Landlord, we are pleased to present the following Proposal for office space in the above referenced Building. 1. Commencement Date: January 1, 2013 2.- Premises: The Premises is comprised of approx. 1,623 rentable square feet. 3. Initial Lease Term and The Initial Lease Term shall be 36 months. Tenant shall have Options to Renew: two (2) consecutive renewal options to extend the term by periods of 36 months each under the same terms and conditions except for Base Rent which shall be at a negotiated rate. 4. Base Rent/Deposit: The Base Rent shall be: Year 1 - $1,352.50 per month + NNN Year 2 - $1,399.83 per month + NNN Year 3 - $1,448.83 per month + NNN • NNN = Operating Expenses as defined below *The Deposit shall be equal to the last months rent plus estimated NNN Charges. 5. Operating Expenses: Tenant shall be responsible for their prorated share of all building operating expenses which shall include but is not limited to, real estate taxes, insurance, common area maintenance, and all other customary expenses associated with the ongoing operation and maintenance of an office facility in Yakima, Washington. Tenant shall be responsible for the cost of janitorial services for said premises. 2012 estimated NNN expenses are $3.00 per square foot per year. 6. Condition of Premises: Landlord shall warrant that the premises (including the systems serving the premises and the building in which they are located) are in good working condition. 7. Tenant Improvement Landlord shall provide Tenant with a Turn-key Tenant Allowance: Improvement Package consistent with the improvements identified on attached Exhibit "A ". Tenant shall be responsible for 75% of the total tenant improvement cost. Tenants estimated share of improvements is $11,250.00. • KCI COMMERCIAL, INC. P.O. Box 1135/ Tacoma, Washington 98401 / Phone (253) 475 -4363 / FAX (253) 475 -4304 8. Signage: All signage shall be at the sole cost and expense of the Tenant and be consistent with local sign codes and Building standards. 9. Building Hours: Tenant shall have twenty -four (24) hour, seven (7) days per week, access to the Building. 10. Disclaimer: This proposal sets forth the principal terms and conditions of the contemplated lease for Tenant's offices at the Building. Nothing contained herein will be deemed to create any legally binding obligation on either the Landlord or Tenant until a final lease agreement has been executed by, and delivered to, all parties. 11. Confidentiality: We are submitting this lease proposal on the condition that you do not discuss this or any of the matters set forth in this lease proposal or disseminate or distribute any information concerning the terms, details or conditions hereof to any person, firm or entity without obtaining the express written approval of Landlord. 12. Acceptance: If the above terms are acceptable, please acknowledge your acceptance of this proposal by signing where indicated below and returning to our office. This proposal shall be valid until November 7, 2012. If you have any questions regarding the above proposal, please do not hesitate to call me at (253) 475 -4363. Sincerely, Trevor Colby KCI Commercial Inc. Agreed and accepted this day of , 2012. LANDLORD TENANT By: B Its: Its: KCI COMMERCIAL INC. P.O. Box 1135/ Tacoma, Washington 98401 / Phone (253) 475 -4363 / FAX (253) 475 -4304