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On May 6, 2003 the City Council approved an agreement with PV on the Net for the Lease of the Cable Television studio. A copy of the May 6, 2003 staff report (with Agreement) is attached. At that time it was staff’s understanding that without the offer from PV on the Net to equip and operate the studio, the City Council may not have been able to fund this project. The term of the studio lease was for a period of five years, but could be terminated by either PV on the Net, or the City upon 90 days notice. After receiving notice of termination PV on the Net would have180 days to remove equipment and vacate the premises.
On November 15, 2005 the City Council conceptually approved the addition of a 320 square foot PVAN building and a 960 square foot PV on the Net building to be constructed adjacent to one another near the cable studio. The cost of extending electrical utilities to the two buildings was to be shared equally by the City and PV on the Net and was estimated at about $3,500 apiece.
At the Cable TV Committee meeting of February 3, 2006 TV Manager Holt reported that she had met with SCROC representatives who expressed an interest in using the City Cable TV studio as a classroom for formal training of students. She asked if there was a scenario under which PV on the Net would allow this use of the studio. It was agreed that Ted Vegvari and Gabriella Holt would meet with the SCROC superintendent to try to work out a SCROC/PVNet/City/PVHS partnership for use of the studio.
Unfortunately, after several months of trying to work out this partnership, it was agreed that it would be best for all if PV on the Net would give up the remaining two years of their lease and vacate the studio by September 1, 2006. The City Manager accepted the task of attempting to work out such an arrangement. There were three goals that the City Manager felt he was tasked with:
1. Obtain City control of the studio by September 1st.
The Cable TV Committee, at their meeting of June 9, 2006, received a draft of the proposed lease agreement. There are no minutes of that meeting and the City Manager does not recall any discussion of the agreement other than a generally expressed appreciation that PV on the Net would be out of the studio in time to accommodate the SCROC classes scheduled to begin in early September. It was pointed out to the City Manager that it was urgent that both PV on the Net and SCROC have a commitment on the part of the City in order to plan their respective programs.
On June 20, 2006 the PV on the Net Lease Agreement, recommended (as understood by the City Manager) by the Cable TV Committee, was entered into between the City and PV on the Net. The new Lease Agreement stated that in exchange for the remaining two-year Cable TV Studio lease and the donation of cameras and lighting that were currently installed in the studio, the City would agree to:
1. Allow PV On The Net to place a larger (than that originally proposed and conceptually approved by Council on November 15, 2005) modular building on City property, and
The staff report (with Agreement) of June 20, 2006 is attached. Although Exhibit A to the Agreement described the location and size of the new PV on the Net modular building, there was no discussion of the size of the building in the staff report. In order to get the agreement before the City Council as soon as possible, no new maintenance and utility cost estimates were prepared. The staff report stated that the annual fiscal impact to the City of the lease agreement would be $5,000. This figure was an estimate of the cost of building maintenance, including custodial service. The cost of extending utilities to the PV on the Net building that was formerly (under the November 15, 2005 conceptual agreement) to be borne by PV on the Net, but would now be a cost to the City, was overlooked. No allowance for the annual cost of utilities was included as the City Manager felt that energy costs could be absorbed in the $110,000 already budgeted for electricity for all City buildings.
As the City Council is aware, the building actually approved on June 20, 2006 was 1440 square feet. When the Public Works Department generated new estimates for the custodial service for the building, the cost rose to $6,500 annually. The annual cost of energy (primarily for air conditioning) is now estimated at $8,500, although it appears that the size and energy demand of the air conditioners for the 1440 square foot building and the 960 square foot building are identical. The total annual maintenance budget for the 1440 square foot building was re-estimated in August at $10,000 and the utilities/telephone/alarm system budget (previously thought to be negligible) was added into the budget at $10,150.
The Council asked “why were the costs more than those estimated in the June 20, 2006 Staff Report and how can we address issues like this in the future?”
The answer to the first part of the question….why were the costs more…?
The answer to the second part of the question…how can we avoid issues like this in the future…?
Enclosures: City Council Staff Report - May 6, 2003