BOARD MEETING DATE: September 8, 2006
AGENDA NO. 12

Amend Contract for Lease of South Bay Field Office

SYNOPSIS:

On July 20, 2001, the Board approved renewal of the lease for the South Bay field office, used by inspectors who conduct refinery inspections in the area.  This action is to amend the contract to extend the lease with Circle Racquet Ball Courts, for another five-year term.  Funding for this lease contract has been included in the FY 2006-07 Budget and will be requested in successive fiscal years.

COMMITTEE:

Administrative, July 14, 2006, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman of the Board to execute an amendment to the lease contract with Circle Racquet Ball Courts, extending the lease for five years at a total cost of $417,486, plus increases after the first year in operating expenses (insurance, taxes, utilities and administrative, janitorial, and landscape maintenance services).

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD maintains an office in the South Bay area to permit refinery inspectors efficient access to the oil refining facilities in the area.  On July 20, 2001, the Board approved renewal of the lease for this office for a five-year period at a total cost of $380,649, plus increases in operating costs.  The lease expires September 30, 2006.

Proposal

Staff recommends amending existing contract #95138-2 with Circle Racquet Ball Courts, to extend the term of the lease for the South Bay field office for five years at a total cost of $417,486 plus increases in operating costs after the first year.

AQMD currently pays $1.65 per square foot for this office.  In anticipation of the expiration of the lease, staff surveyed office space available in the area and could not find comparable space that met the unit’s needs at a lower cost.  Staff has negotiated a renewal rate of $1.60 per square foot for the first year, with a 5¢-per-square-foot increase each subsequent year.  The monthly base rate for each of the five years is $6,548.80, $6,753.45, $6,958.10, $7,162.75, and $7,367.40.  This lease also includes an annually adjusted monthly fee for increases after the first year in operating costs (insurance, taxes, utilities, and administrative, janitorial, and landscape maintenance services), which, in the fifth-year of the existing lease, is $1,317 per month.  All other terms and conditions of the lease remain the same.

Resource Impacts

Sufficient funds for this lease are available in the approved FY 2006-07 Budget for the remainder of this fiscal year and would be included in budget requests for each of the remaining fiscal years of the five-year contract.