HomeMy WebLinkAbout2015 CON Medifit Community Services - Aquatic Services Las Palmas PoolSERVICE AGREEMENT
BY AND BETWEEN
THE CITY OF NATIONAL CITY
AND
MEDIFIT COMMUNITY SERVICES LLC
FOR THE OPERATION OF LAS PALMAS POOL
This Service Agreement (this "Service Agreement") is entered into by and between the CITY OF
NATIONAL CITY, a municipal corporation (the "CITY"), and MEDIFIT COMMUNITY
SERVICES LLC, a limited liability company ("MEDIFIT").
RECITALS
A. The CITY owns the real property commonly known as Las Palmas Pool, located at 1800
E. 22nd Street, National City, California (the "Premises") as depicted on Exhibit A.
B. MEDIFIT is a privately -held fitness and wellness management and consulting company
and is in the business of designing, managing and operating all aspects of mixed use
health, fitness and aquatics centers similar to Las Palmas Pool.
C. The CITY wishes to have MEDIFIT operate the Las Palmas Pool with MEDIFIT
programs serving the local community.
D. The CITY is responsible for repair and maintenance of the Premises, which includes
improvements, landscaping, janitorial, facility maintenance, chemical maintenance and
information technology. The City desires to engage MEDFIT to operate of the Premises,
which includes, personnel, programming, events and operating procedures and policies.
NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the
promises and covenants hereinafter set forth, the parties agree as follows:
ARTICLE 1
TERM OF AGREEMENT
1.1 Term. The term of this Service Agreement shall be for twenty (20) months beginning
November 4, 2015 (the "Commencement Date") and terminating on June 30, 2017 (such period,
the "Term").
1.2 Option to Extend Term. This Service Agreement may be extended upon mutual
agreement between the parties. If either party desires an extension, the requesting party must
make the request for an extension to the Tenn no less than nine (9) months prior to the end of the
Term and mutual agreement must be reached no less than six (6) months prior to the end of the
Term. At the time of an extension request, MEDIFIT and the CITY shall discuss a mutually
agreed upon scope of work for the extended Term. The CITY and MEDIFIT may mutually agree
to extend the Term of this Service Agreement for up to two (2) additional one (1) year terms.
1
Service Agreement
Between City and MediFit
9-4-15
1.3 Transition Period. Should the CITY or MEDIFIT decide not to extend this Service
Agreement within the timeframe above, MEDIFIT will work with the CITY to transition the
operations to the CITY over the six (6) month period preceding the end of the Term of this
Service Agreement.
ARTICLE 2
PREMISES AND PERSONAL PROPERTY
2.1 Facilities to be Operated. For the purpose of operating the Premises for the benefit of the
citizens of National City, the CITY hereby engages MEDIFIT to operate the Premises, subject to
the covenants and conditions hereinafter set forth, on the Commencement Date. Facilities to be
operated include the main pool, the activity pool, the locker rooms, main pump and storage
rooms and the main lobby and administrative offices (the "Facilities"). The main pool is 50
meters by 19.8 meters, with 8 lanes of 50 meters, including one 3 meter diving board and two 1
meter diving boards. The activity pool is 80 feet long and at its widest it is 45 feet wide with a
total area of 81,000 square feet; it has 4 different spray features and a 16 foot high slide with a
ride length of 134.58 feet. The locker rooms are enclosed by a high wall and have a large
changing area, showers and restrooms. There is a main pump room adjacent to the pool along
with multiple storage rooms. There is also a main lobby and administrative offices.
2.2 Ownership of Personal Property and Improvements. The rights and obligations of the
parties regarding the ownership of personal property and improvements on the Premises shall be
as follows:
2.2.1 All of the CITY's personal property not permanently affixed to the Premises
("Personal Property"), such as but not limited to, furnishings, office equipment and
supplies shall remain the property of the CITY. All improvements existing on the
Premises ("Improvements"), together with all fixtures permanently attached to the
Premises ("Fixtures"), as of the Commencement Date shall remain the property of the
CITY during the Term. MEDIFIT shall not remove any Personal Property,
Improvements, or Fixtures from the Premises nor waste, destroy, or modify any Personal
Property, Improvements, or Fixtures on the Premises. All new Improvements, together
with all new Fixtures permanently attached to the Premises, after the Commencement
Date shall remain the property of the CITY during the Term. MEDIFIT shall not remove
any of the CITY's Personal Property, Improvements, or Fixtures from the Premises nor
waste, destroy, or modify any Personal Property, Improvements, or Fixtures on the
Premises.
2.2.2 All of MEDIFIT's personal property not permanently affixed to the Premises shall
remain the property of MEDIFIT.
ARTICLE 3
PERMITTED USE
2
Service Agreement
Between City and MediFit
9-4-15
3.1 Permitted Uses. MEDIFIT shall operate the Premises by providing for and facilitating
the following proposed activities beginning January 2016, which may be amended or replaced
from time -to -time by agreement of the authorized representatives of the parties:
3.1.1 Open Swim on Saturday and Sunday throughout the year and open swim seven
(7) days a week during the months of June, July and August; as well as during the
National School District two (2) week fall break that occurs during September and/or
October. In addition, consideration based on need will be given for an expanded open
swim schedule during the National School District two (2) week winter and spring
breaks.
3.1.2 Learn to swim classes throughout the year based on community needs. The
number of classes offered will increase during the months of June, July and August. A
variety of learn to swim classes for youth and adults with varying levels of experience
will be offered. Cancelation of classes is permitted if enrollment is under three (3)
participants.
3.1.3 Exercise classes for various ages and abilities and offered based on community
needs. Cancelation of classes is permitted if enrollment is under five (5) participants.
3.2 Hours of Service. MEDIFIT may provide programming between the hours of 7:00 a.m.
and 10:00 p.m. seven (7) days a week beginning January 2016. Hours of service may be changed
upon mutual agreement.
3.2 CITY Use. The City may use the Premises for special events including National Night
Out and Summer Movies in the Park. The CITY may use the Premises for up to ten (10)
additional events or programs per year. Dates and times of such uses will be agreed upon by the
CITY and MEDIFIT.
3.3 Consideration. MEDIFIT's performance under this Service Agreement shall serve as the
sole consideration due to the CITY for MEDIFIT's right to operate the Premises.
3.4 CITY Residents. Participants seeking day use of the Premises who prove to MEDIFIT's
satisfaction that they are residents of the CITY shall not be required to become members of
MEDIFIT and shall be offered reduced resident rates.
ARTICLE 4
SERVICES
4.1 MEDIFIT shall render the management services listed below (the "Services") to the
CITY for the on -site management and supervision of the Premises. The Services shall be
performed in accordance with generally accepted standards in the fitness and wellness
management industry and shall be performed in accordance with such requirements or
restrictions as may be imposed by any government authority. MEDIFIT shall provide the
Services as follows:
3
Service Agreement
Between City and MediFit
9-4-15
4.1.1 MEDIFIT has formulated an annual budget in accordance with financial targets
for net operating income/surplus and meeting agreed upon benchmarks as set forth in
Exhibit B attached hereto and incorporated herein. The budget is mutually agreed upon
by the CITY and MEDIFIT.
4.1.2 MEDIFIT shall endeavor to meet or exceed the revenue goals as set forth in
Exhibit B through the development and execution of effective marketing and retention
plans.
4.1.3 MEDFIT shall provide learn to swim classes, open swim and other programs at
affordable resident rates approved by the City.
4.1.4 MEDIFIT shall endeavor to meet or exceed budgeted net operating
income/surplus goals as set forth in Exhibit B. Financial results will be monitored by and
reviewed with the CITY on a monthly, quarterly and annual basis.
4.1.5 MEDIFIT shall provide quarterly reports to the City denoting National City
participant numbers, total participant numbers, events and programs coordinated, total
use by third parties, such as athletic teams, and any other pertinent statistics.
4.1.6 MEDIFIT shall recruit, hire and employ, as employees of MEDIFIT, all persons
who will work at, or provide services to the Premises, managed by MEDIFIT in
furtherance of the CITY operations (all such persons being referred to herein, collectively
as "Managed Personnel"). Salaries and other expenses of Managed Personnel will be
charged to CITY as an operating expense only to the extent such Managed Personnel are
actually employees of MEDIFIT.
Both parties hereto in the performance of this Service Agreement will be acting in an
independent capacity and not as agents, employees, partners, or joint venturers with one
another. Neither MEDIFIT nor, to MediFit's knowledge, MEDIFIT'S employees are
employees of the CITY, and are not entitled to any of the rights, benefits, or privileges of
the CITY'S employees, including but not limited to retirement, medical, unemployment,
or workers' compensation insurance.
This Service Agreement contemplates the personal services of MEDIFIT and
MEDIFIT'S employees, and it is recognized by the parties that a substantial inducement
to the CITY for entering into this Service Agreement was, and is, the professional
reputation and competence of MEDIFIT and its employees. Neither this Agreement nor
any interest herein may be assigned by MEDIFIT without the prior written consent of the
CITY. Nothing herein contained is intended to prevent MEDIFIT from employing or
hiring as many employees as MEDIFIT may deem necessary for the proper and efficient
performance of this Service Agreement. All agreements by MEDIFIT with third parties
shall require the third party to adhere to the applicable terms of this Service Agreement.
4
Service Agreement
Between City and MediFit
9-4-15
4.1.7 MEDIFIT will manage personnel, facilities and programs/services in a manner
consistent with the mission and values of the CITY. MEDIFIT will provide personnel as
it deems reasonably necessary to perform the Services set forth in this Service
Agreement. Personnel will be trained by MEDIFIT to properly perform the Services.
MEDIFIT will present the CITY with General Manager candidates for review prior to
hiring. The CITY will have the right to disapprove of the General Management
candidates.
4.1.8 MEDIFIT will establish and implement policies and procedures designed to
operate the Premises in a manner that promotes safety, customer service and financial
accountability.
4.1.9 MEDIFIT will work closely with the CITY and the Community Services
Department in designing and implementing effective and low cost program marketing
campaigns, including community outreach to find programming opportunities. MEDIFIT
will develop and launch outdoor fitness and program initiatives.
4.1.9.1 Use by Others. MEDIFIT may allow use of the Premises to other groups
or organizations such as athletic teams/clubs. Any third party group users such as
athletic teams/clubs shall be required to obtain a facility use permit from the
CITY, and shall pay fees to the CITY for their use of the Premises.
4.1.10 MEDIFIT will develop and enhance measurement and analytics capabilities to
help optimize revenue.
4.1.11 MEDIFIT will assist the CITY with a needs assessment for the Premises, which
includes, but is not limited to, providing analysis and recommendations to improve
operations and collecting input from the community through survey's and community
meetings.
ARTICLE 5
EQUIPMENT
5.1 The CITY will be solely responsible for providing and equipping the Premises
(including, without limitation, Automatic External Defibrillators) so that the Services may be
rendered by MEDIFIT in accordance with this Service Agreement and in compliance with all
applicable rules and regulations relating to the Premises and the Services. The CITY shall
provide such items as office furniture and equipment, telephones, computers and software for the
Premises. The CITY will also be responsible for purchasing or leasing all aquatic related
exercise equipment and safety and first aid equipment necessary to operate the Premises as
reasonably requested by MEDIFIT. The CITY also agrees to, at its sole expense, maintain such
equipment to the best of their ability. The CITY will consider the nature and priority of the
maintenance and available funding to determine if and when such repairs and maintenance will
be completed.
5
Service Agreement
Between City and MediFit
9-4-15
5.2 MEDFIT shall, provide general administrative supplies and marketing materials
necessary for the operation of the Premises at the City's sole cost and expense. The City shall
pay for such supplies and materials within thirty (30) days of receipt of MEDIFIT's invoice
therefor. MEDIFIT shall prepare and distribute marketing materials and CITY shall assist with
the distribution of marketing materials.
ARTICLE 6
UTILITIES
6.1 Utility Services. The CITY shall be responsible for maintaining utility services to the
Premises, and shall provide and pay for all utilities or services necessary for its use and operation
of the Premises during the Term, including but not limited to gas, water, electricity, trash, sewer
charges and telephone. The CITY shall pay directly to the applicable utility company such
charges, and MEDIFIT shall have no obligation to pay for such utility services.
ARTICLE 7
REPAIRS; MAINTENANCE
7.1 CITY Repair and Maintenance Obligations. The CITY shall, at its own cost and expense,
repair, maintain in good and tenantable condition, ordinary wear and tear excepted, and replace,
as necessary, the Premises. The CITY is responsible for all repair and maintenance including but
not limited to, landscape maintenance, janitorial maintenance and facility maintenance. The
CITY shall work with MEDIFIT to maintain public safety, hygiene and fire safety of the
Premises. The CITY shall consider the nature and priority of the work and available funding to
determine if and when such repairs and maintenance will be completed.
7.1.1 Landscape Maintenance. The CITY is responsible for all outdoor cleaning and
landscape maintenance at the Premises.
7.1.2 Janitorial Maintenance. The CITY is responsible for janitorial maintenance at the
Premises, including but not limited to, routine cleaning of office, lobby, restrooms and
locker rooms which includes waste removal, window cleaning, sweeping and mopping
floors, and dusting and wiping counters and surfaces. The CITY is responsible for
stocking janitorial items such as toiletries and cleaning supplies. The CITY has sole
discretion on the frequency of cleaning and amount of janitorial items stocked.
7.1.3 Facility Maintenance. The CITY is responsible for all facility maintenance,
including but not limited to, electrical, lighting, plumbing, pool chemicals, paint,
flooring, HVAC systems and heat and air conditioning.
7.1.4 Information Technology. The CITY is responsible for providing internet access,
telephones and support services.
7.2 MEDIFIT Repair and Maintenance Obligations. MEDFIT shall operate the Premises in a
manner that promotes the safety and security of the public while MEDFIT personnel is on the
Premises. Safety and security issues must be reported to the designated CITY contact promptly
6
Service Agreement
Between City and MediFit
9-4-15
and MEDIFIT personnel will endeavor to protect the safety and security of the public until the
CITY can address the safety and/or security issue.
Except for normal wear and tear occurring in the ordinary course of business, MEDIFIT agrees
to repair or replace any damage or injury done to the Premises, or Personal Property, or any part
thereof, caused by MEDIFIT or MEDIFIT's agents, employees or invitees, at MEDIFT's own
cost and expense. If MEDIFIT fails to make such repairs or replacements promptly, CITY may,
at its option, make such repairs or replacements, and MEDIFIT shall repay the cost thereof to the
CITY within ten (10) days of written demand. However, for any repair work, costing over Five
Hundred and no/100 Dollars ($500.00) to be performed by MEDIFIT or MEDIFIT's agents,
MEDIFIT shall not perform such repair work without the CITY's prior written consent. Any
repairs or replacements in or to the Premises, other than repair work in emergency situations,
which would require an expenditure exceeding Five Thousand and no/100 Dollars ($5,000.00)
and which constitute a "public project" under Section 20161 of the California Public Contract
Code, shall be contracted for/by CITY and let to the lowest responsible bidder after notice.
7.3 CITY Right to Inspect. MEDIFIT shall permit the CITY to enter the Premises at all
times to inspect the Premises, provided, however, that such entry shall not unreasonably interfere
with MEDIFIT's operation of the Premises. Nothing contained in this Article 7, however, shall
be construed as creating any duty on the part of the CITY to do any work which, under any
provision of this Agreement, MEDIFIT may be required to do.
7.4 Prevailing Wages. MEDIFIT shall, pay prevailing wages if required by law for work
performed on the Premises.
ARTICLE 8
FEES AND PAYMENT TERMS
8.1 Fees. The CITY shall pay MEDIFIT a monthly base management fee, actual payroll and
staffing expenses and marketing and administrative costs as set forth in this Article 8.1 and
Exhibit B.
8.1.1 Base Management Fee. As compensation for the Services, the CITY shall pay
MEDIFIT a monthly base management fee (the "Base Management Fee") for each month
beginning November 4, 2015 (prorated for any partial months at the beginning or end of
the Term) in the amount of $5,000 per month throughout the Term and the Base
Management Fee shall be invoiced monthly. The Base Management Fee shall be due
thirty (30) days after receipt of invoice therefor.
8.1.2 Payroll and Staffing Expenses. MEDIFIT shall recruit, hire and employ, as
employees of MEDIFIT, all persons who will work at, or provide services at the
Premises. Monthly payroll and staffing expenses are estimated as set forth in Exhibit B
and will be charged to the CITY as an operating expense only to the extent such Managed
Personnel are actually employees of MEDIFIT.
7
Service Agreement
Between City and MediFit
9-4-15
8.1.3 Marketing and Administrative Costs. MEDFIT shall, provide such items as
general administrative supplies and marketing materials necessary for the operation of the
Premises. Monthly marketing and administrative costs are estimated as set forth in
Exhibit B and the cost of the marketing materials and the administrative supplies shall be
paid for by the City within thirty (30) days after receipt of an invoice setting forth the
amount of such costs.
8.2 Payment Terms. The CITY shall pay MEDIFIT ninety percent (90%) of the estimated
monthly operating expenses as set forth in Exhibit B on or before the first (1st) day of every
month. At the end of the month MEDIFIT shall submit an invoice for the remaining balance due.
8.2.1 90% Monthly Payment. Commencing on December 1, 2015 the CITY will pay to
MEDIFIT, on or before the first (1st) day of every month, an amount equal to ninety
percent (90%) of MEDIFIT's budgeted monthly Base Management Fee, estimated
payroll and staffing expenses, and estimated marketing and administrative costs, as set
forth in Exhibit B. The initial payment shall be payable on the first (1st) day of December
2015. The remainder of the actual monthly payment shall be paid as set forth in 8.1.3.
8.1.3 Monthly Balance Due Payment. MEDIFIT shall submit an invoice for the
remaining balance due each month in which Services are rendered. To the extent
applicable, each invoice will reflect the monthly Base Management Fee, actual payroll
and staffing expenses and actual marketing and administrative costs together with all
amounts payable to MEDIFIT as set forth in Exhibit B, less any payments or revenue
received during the month in which Services are rendered. Upon request, MEDIFIT shall
submit to the CITY supporting documentation for payroll and staffing expenses and
marketing and administrative costs. Supporting documentation may be, but is not limited
to, copies of payroll and receipts for purchases.
8.3 Not to Exceed Amount. MEDIFIT agrees that the combined base management fee,
payroll and staffing fees, and marketing and administrative costs, shall not exceed a total of
$650,000 over the Term of this Agreement. Should the parties agree to extend the Service
Agreement, Article 8.3 must be negotiated and mutually agreed upon.
8.4 Third Party Rental Groups. The CITY will separately collect and retain rental revenue
from third party rental groups. MEDIFIT shall allow all CITY approved third party rental groups
to use the Premises and shall give priority use to CITY requests for either third party rental
groups or CITY use for events.
8.5 Revenue Collected by MEDIFIT. Revenue collected by MediFit for its programing of
open swim, learn to swim, and exercise classes will be collected and handled by MEDIFIT.
MEDIFIT shall submit daily cash receipts to the CITY each month with the monthly balance due
invoice.
8.6 Notwithstanding any other provision contained herein, in the event that CITY's
outstanding balance for fees and charges to MEDIFIT is greater than ninety (90) days past due,
MEDIFIT will have the right to immediately and unilaterally terminate this Agreement.
8
Service Agreement
Between City and MediFit
9-4-15
8.7 The CITY shall be responsible for all sales, use and excise taxes, and any other similar
taxes, duties and charges of any kind imposed by any federal, state or local governmental entity
on any amounts payable by the CITY hereunder.
ARTICLE 9
TAXES
9.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments,
charges, or transfer taxes, license and transaction fees, including, but not limited to, (i) any state,
local, federal income tax, or any real or personal property tax, (ii) increases in taxes attributable
to MEDIFIT's operation of the Premises, or (iii) any taxes which are essentially payments to a
governmental agency, other than the CITY, for the right to make improvements to the Premises.
MEDIFIT recognizes and agrees that this agreement may create a possessory interest subject to
property taxation and that MEDIFIT may be subject to the payment of taxes levied on such
interest. MEDIFIT agrees to pay, before delinquency, all taxes, assessments and fees assessed or
levied upon the Premises.
9.2 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes
accruing against MEDIFIT.
ARTICLE 10
INDEMNIFICATION AND INSURANCE
10.1 MEDIFIT's Indemnity. MEDIFIT agrees to defend, indemnify and hold harmless the
City of National City, its officers and employees, against and from any and all liability, loss,
damages to property, injuries to, or death of any person or persons, and all claims, demands,
suites, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature,
including workers' compensation claims, of or by anyone whomsoever, resulting from or arising
out of the MEDIFIT'S performance or other obligations under this Agreement; provided,
however, that this indemnification and hold harmless shall not include any claims or liability
arising from the established sole negligence or willful misconduct of the CITY, its agents,
officers, or employees. The indemnity, defense, and hold harmless obligations contained herein
shall survive the termination of this Operating Agreement for any alleged or actual omission, act,
or negligence under this Operating Agreement that occurred during the term of this Operating
Agreement.
10.2 Insurance. MEDIFIT, at its sole cost and expense, shall purchase and maintain, and shall
require its subcontractors, when applicable, to purchase and maintain throughout the term of this
Service Agreement, the following checked insurance policies:
A. ® If checked, Professional Liability Insurance (errors and
omissions) with minimum limits of $1,000,000 per occurrence.
B. Automobile Insurance covering all bodily injury and property damage
incurred during the performance of this Agreement, with a minimum coverage of $1,000,000
combined single limit per accident. Such automobile insurance shall include owned, non -owned,
and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents and
9
Service Agreement
Between City and MediFit
9-4-15
employees as additional insureds, and a separate additional insured endorsement shall be
provided.
C. Commercial General Liability Insurance, with minimum limits of
$5,000,000 per occurrence and $10,000,000 aggregate, covering all bodily injury and property
damage arising out of its operations under this Service Agreement. The policy shall name the
CITY and its officers, agents and employees as additional insureds, and a separate additional
insured endorsement shall be provided. The general aggregate limit must apply solely to this
"project" or "location".
D. Workers' Compensation Insurance in an amount sufficient to meet
statutory requirements covering all of MEDIFIT'S employees and employers' liability insurance
with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a
waiver of subrogation in favor of the City. Said endorsement shall be provided prior to
commencement of work under this Service Agreement.
If MEDIFIT has no employees subject to the California Workers'
Compensation and Labor laws, MEDIFIT shall execute a Declaration to that effect. Said
Declaration shall be provided to MEDIFIT by CITY.
E. The aforesaid policies shall constitute primary insurance as to the CITY,
its officers, employees, and volunteers, so that any other policies held by the CITY shall not
contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior
written notice to the CITY of cancellation or material change.
F. If required insurance coverage is provided on a "claims made" rather than
"occurrence" form, the MEDIFIT shall maintain such insurance coverage for three years after
expiration of the term (and any extensions) of this Service Agreement. In addition, the "retro"
date must be on or before the date of this Service Agreement.
G. Insurance shall be written with only California admitted companies that
hold a current policy holder's alphabetic and financial size category rating of not less than A VIII
according to the current Best's Key Rating Guide, or a company equal financial stability that is
approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted
"surplus lines" carriers, they must be included on the most recent California List of Eligible
Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements.
H. This Service Agreement shall not take effect until certificate(s) or other
sufficient proof that these insurance provisions have been complied with, are filed with and
approved by the CITY'S Risk Manager. If the MEDIFIT does not keep all of such insurance
policies in full force and effect at all times during the terms of this Service Agreement, the CITY
may elect to treat the failure to maintain the requisite insurance as a breach of this Service
Agreement and terminate the Service Agreement as provided herein.
I. All deductibles and self -insured retentions in excess of $10,000 must be
disclosed to and approved by the CITY.
ARTICLE 11
TERMINATION
11.1 This Service Agreement may be terminated with or without cause by the CITY.
Termination without cause shall be effective only upon 60-day's written notice to MEDIFIT.
During said 60-day period MEDIFIT shall perform all services in accordance with this Service
Agreement. This Service Agreement may also be terminated immediately by the CITY for cause
10
Service Agreement
Between City and MediFit
9-4-15
in the event of a material breach of this Service Agreement, misrepresentation by MEDIFIT in
connection with the formation of this Service Agreement or the performance of services, or the
failure to perform services as directed by the CITY. Termination with or without cause shall be
effected by delivery of written Notice of Termination to MEDIFIT as provided for herein. The
CITY further reserves the right to immediately terminate this Service Agreement upon: (1) the
filing of a petition in bankruptcy affecting MEDIFIT; (2) a reorganization of MEDIFIT for the
benefit of creditors; or (3) a business reorganization, change in business name or change in
business status of MEDIFIT.
11.2 This Service Agreement may be terminated by MEDIFIT by notice to the CITY, at any
time if (1) the CITY becomes insolvent or admits its inability to pay its debts generally as they
become due, (2) the CITY becomes subject, voluntarily or involuntarily, to any proceeding under
any domestic or foreign bankruptcy or insolvency law, which is not fully stayed within seven (7)
days or is not discussed or vacated within forty-five (45) days after filing, (3) the CITY is
dissolved or liquidated or takes any action for such purpose, (4) the CITY makes a general
assignment for the benefit of creditors, or (5) the CITY has a receiver, trustee, custodian or
similar agent appointed by order of any court of competent jurisdiction to take charge of or sell
any material portion of its property or business.
11.3 Upon termination of this Agreement, within thirty (30) days of the termination MEDIFIT
shall return to the CITY all property of the CITY, and MEDIFIT shall remove all property of
MEDIFIT at MEDIFIT's expense.
ARTICLE 12
HAZARDOUS MATERIALS
12.1 Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous
Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees,
orders, regulations or court decisions (including the so-called "common law"), including without
limitation the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C., sec.9601 et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C., sec.1801 et seq.), and the Resource Conservation and Recovery Act of
1986, as amended (42 U.S.C., sec. 6901 et seq.), relating to hazardous substances, hazardous
materials, hazardous waste, toxic substances, environmental conditions on, under or about the
Premises, soil and ground water conditions or other similar substances or conditions.
12.2 Hazardous Materials - Definition. As used in this Section the term "Hazardous
Materials" means any chemical, compound, material, substance or other matter that:
12.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine,
bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material,
whether injurious or potentially injurious by itself or in combination with other materials;
11
Service Agreement
Between City and MediFit
9-4-15
12.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials
Laws;
12.2.3 gives rise to any reporting, notice or publication requirements under any
Hazardous Materials Laws, or
12.2.4 is any other material or substance giving rise to any liability, responsibility or
duty upon the CITY or MEDIFIT with respect to any third person under any Hazardous
Materials Law.
12.3 MEDIFIT Representations and Warranties. MEDIFIT represents and warrants that,
during the Term or any extension thereof, MEDIFIT shall comply with the following provisions
of this Section unless otherwise specifically approved in writing by CITY, subject to the terms
and conditions of MEDIFIT maintenance obligations provided elsewhere in this Service
Agreement:
12.3.1 MEDIFIT shall not cause or authorize any Hazardous Materials to be brought,
kept or used in or about the Premises by MEDIFIT, its agents, employees, assigns,
contractors or invitees, except as required by MEDIFIT's permitted use of the Premises in
the normal course of operations;
12.3.2 Any handling, transportation, storage, treatment or usage by MEDIFIT of
Hazardous Materials that is to occur on the Premises following the Commencement Date
shall be in compliance with all applicable Hazardous Materials Laws;
12.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials
which may occur on the Premises following the Commencement Date shall be promptly
reported in writing to CITY;
12.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of,
or located by MEDIFIT in the Premises;
12.3.5 No underground improvements, including but not limited to treatment or storage
tanks, or water, gas or oil wells shall be located by MEDIFIT on the Premises without
CITY's prior written consent;
12.3.6 MEDIFIT shall promptly supply the CITY with copies of all notices, reports,
correspondence, and submissions made by MEDIFIT to the United States Environmental
Protection Agency, the United Occupational Safety and Health Administration, and any
other local, state or federal authority which requires submission of any information
concerning environmental matters or hazardous wastes or substances pursuant to
applicable Hazardous Materials' Laws with respect to the Premises; and
12.3.7 MEDIFIT shall promptly notify the CITY of any liens threatened or attached
against the Premises pursuant to any Hazardous Materials' Law.
ARTICLE 13
ASSIGNMENT
12
Service Agreement
Between City and MediFit
9-4-15
13.1 CITY's Consent Required. MEDIFIT shall not voluntarily or involuntarily assign or
otherwise transfer all or any portion of its rights and duties under this Agreement without the
CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior
written consent shall be void.
ARTICLE 14
DEFAULTS BY MEDIFIT; REMEDIES
14.1 Events of Default; Remedies. If MEDIFIT neglects or fails to perform or observe any of
its obligations under the terms, covenants, or conditions contained in this Service Agreement
within thirty (30) days after written notice of default or, when more than thirty (30) days shall be
required because of the nature of the default, if MEDIFIT fails to cure such default after written
notice thereof, then MEDIFIT shall be liable to the CITY for any and all damages sustained by
the CITY as a result of MEDIFIT breach and the CITY may terminate this Service Agreement.
ARTICLE 15
DEFAULTS BY CITY; REMEDIES
15.1 Events of Default; Remedies. If the CITY neglects or fails to perform or observe any of
its obligations under the terms, covenants, or conditions contained in this Service Agreement
within thirty (30) days after written notice of default or, when more than thirty (30) days shall be
required because of the nature of the default, if the CITY fails to cure such default after written
notice thereof, then the CITY shall be liable to MEDIFIT for any and all damages sustained by
MEDIFIT as a result of the CITY's breach and MEDIFIT may terminate this Service Agreement.
ARTICLE 16
DAMAGE OR DESTRUCTION
17.1 CITY Duty to Repair Casualty. Except as provided in this article and subject to the terms
and conditions of MEDIFIT maintenance obligations provided elsewhere in this Service
Agreement, should the Premises be damaged by fire, earthquake, or any other identifiable event
of a sudden, unexpected, or unusual nature (Casualty), the CITY, at the CITY's sole discretion
may repair any damages to the Premises, and may repair, restore and replace any such damaged
or destroyed Fixtures, Improvements or Personal Property. In the event the City decides not to
repair any damage, and such damage renders the Premises inoperable, the City may terminate
this agreement as provided in Article 11 (Termination).
17.2 No Abatement. In the event of reconstruction, replacement or repair, MEDIFIT shall
continue its operations on the Premises during any such period to the extent reasonably
practicable from the standpoint of prudent business management, and in continuing compliance
with applicable laws and regulations. MEDIFIT shall not be entitled to any compensation or
damages from the CITY for loss of use of the whole or any part of the Premises, MEDIFIT's
Personal Property, or any inconvenience or annoyance occasioned by such damage,
reconstruction or replacement.
13
Service Agreement
Between City and MediFit
9-4-15
17.3 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the
contrary, if, at any time after the Commencement Date, (i) the Improvements are damaged or
destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (ii)
the damage is such that the Improvements cannot be repaired and restored within one hundred
and eighty (180) days after the Casualty, then MEDIFIT shall have the right to terminate this
Service Agreement upon thirty (30) days' prior written notice to CITY.
ARTICLE 18
EMINENT DOMAIN
18.1 Condemnation. If all of the Premises is taken under eminent domain proceedings by a
party other than CITY, or, if less than all of the Premises is taken under such proceeding and the
part taken substantially impairs the ability of MEDIFIT to use the remainder of the Premises for
the purposes permitted by this Service Agreement, then MEDIFIT may terminate this Service
Agreement as of the date that the condemning authority takes possession by delivery of written
notice of such election within twenty (20) days after MEDIFIT has been notified of the taking or,
in the absence thereof, within twenty (20) days after the condemning authority shall have taken
possession.
18.2 Continuation of Service Agreement After Condemnation. If this Service Agreement is
not terminated by MEDIFIT, it shall remain in full force and effect as to any portion of the
Premises remaining, and this Service Agreement will end as of the date possession of the part
taken by the public entity as to the part of the Premises that is taken.
18.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY
shall have no liability to MEDIFIT for any award not provided by the condemning authority.
ARTICLE 19
SALE OR MORTGAGE BY CITY
19.1 Sale or Mortgage. Subject to MEDIFIT rights under this Service Agreement, CITY
may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time
and without the consent of MEDIFIT, sell, purchase, exchange, transfer, assign, lease, encumber
or convey CITY interest in whole or in part, in the Park (collectively referred to in this Article as
a "Sale"). CITY shall provide to MEDIFIT written notice of CITY intent to a Sale pursuant to
this Article at least ninety (90) days prior to said proposed transfer.
19.2 Release on Sale. From and after a Sale of the CITY's entire interest in the Premises,
upon payment of all amounts due or owing to MediFit, the CITY shall be released from all
liability to MEDIFIT and MEDIFIT successors and assigns arising from this Agreement because
of any act, occurrence or omission of the CITY occurring after such Sale.
ARTICLE 20
SUBORDINATION; ATTORNMENT
14
Service Agreement
Between City and MediFit
9-4-15
20.1 Subordination. Without the necessity of any other document being executed and
delivered by MEDIFIT, this Service Agreement is and shall be junior, subject and subordinate to
any existing or future permits or approvals issued by the United States of America or any local,
State or federal agency affecting the control or operation of the Premises; MEDIFIT shall be
bound by the terms and provisions of such permits or approvals. In addition, this Service
Agreement is and shall also be subject, subordinate and junior to all mortgages, deeds of trust,
and other security instruments of any kind covering the Premises, or any portion thereof, as of
the Commencement Date of this Service Agreement.
ARTICLE 21
CITY'S RIGHT OF ACCESS
21.1 Right of Entry. The CITY, its agents, employees, and contractors may enter the Premises
at any time in response to an emergency, and, at reasonable hours to (a) inspect the Premises and
Improvements; (b) determine whether MEDIFIT is complying with its obligations in this Service
Agreement (including its obligations with respect to compliance with Hazardous Materials
Laws); (c) post notices of non -responsibility or similar notices; (d) inspect the progress of
construction of any improvement; or (e) make repairs that this Service Agreement requires or
allows the CITY to make, or make repairs to any adjoining space or utility services, or make
repairs, alterations, or improvements to any other portion of the Premises; provided, however,
that all work will be done as promptly as reasonably possible and so as to cause as little
interference to MEDIFIT as reasonably possible.
ARTICLE 22
NOTICES
22.1 Notices. Whenever in this Service Agreement it shall be required or permitted that notice
or demand be given or served by either party to this Service Agreement to or on the other, such
notice or demand shall be in writing, mailed or personally delivered to the other party at the
addresses specified below. Mailed notices shall be sent by United States Postal Service, postage
prepaid and shall be deemed to have been given, delivered and received three (3) business days
after the date such notice or other communication is posted by the United States Postal Service.
All other such notices or other communications shall be deemed given, delivered and received
upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at
any time designate a different address to which notices shall be sent.
CITY: City of National City
Attention: Leslie Deese, City Manager
City of National City
1243 National City Boulevard
National City, CA 91950-4301
MEDIFIT: MEDIFIT Community Services LLC
Attention: Dan Burns, Chief Executive Officer and
V. Carl Walker, General Council
25 Hanover Road
15
Service Agreement
Between City and MediFit
9-4-15
Building A, Suite 104
Florham Park, New Jersey 07932
ARTICLE 23
NONDISCRIMINATION
23.1 Nondiscrimination. MEDIFIT hereby covenants by and for itself, its successors, assigns
and all persons claiming under or through it, that this Service Agreement is made and accepted
upon and subject to the condition that there shall be no discrimination against, or segregation of,
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the use, operation, or enjoyment of the Premises.
ARTICLE 24
RECORDS, ACCOUNTS AND AUDITS
24.1 MEDIFIT Duty to Keep Records. MEDIFIT shall, at all times during the Term, and for a
period of five (5) years following expiration or earlier termination of this Service Agreement,
keep or cause to be kept, true and complete books, records and accounts of all financial
transactions in the operation of all business activities, of whatever nature, conducted pursuant to
the rights granted by this Agreement. The books, records and accounts must be supported by
source documents such as sales slips, cash register tapes, purchase invoices or other pertinent
documents.
24.2 CITY's Right to Audit. The CITY shall have the right at any reasonable times, upon
reasonable notice, to examine and perform audits of MEDIFIT's records pertaining to its
operations on the Premises. The cost of said audits shall be borne by the CITY; however,
MEDIFIT shall provide to the CITY at MEDIFIT's expense, necessary data to enable CITY to
fully comply with each and every requirement of the State of California or by the United States
of America for information or reports relating to this Service Agreement and to MEDIFIT's use
of the Premises.
ARTICLE 25
GENERAL PROVISIONS
25.1 Authority. MEDIFIT represents and warrants that it has full power and authority to
execute and fully perform its obligations under this Service Agreement pursuant to its governing
instruments, without the need for any further action, and that the person executing this Service
Agreement on behalf of MEDIFIT is the duly designated agent of MEDIFIT and is authorized to
do so.
25.2 Captions. The captions and headings appearing in this Service Agreement are inserted
for convenience only and in no way define, limit, construe, or describe the scope or intent of the
provisions of this Service Agreement.
16
Service Agreement
Between City and MediFit
9-4-15
25.3 CITY Approval. Except where stated herein to the contrary, the phrases "CITY
approval," and "CITY written approval" or such similar phrases shall mean approval of the City
Manager of National City or said person's representative as authorized by said person in writing.
25.4 Compliance with Laws. MEDIFIT, shall procure, maintain and hold available for the
CITY's inspection, any governmental license or permit required for the proper and lawful
conduct of MEDIFIT operation of the Premises. MediFit shall invoice the CITY for expenses
related to any governmental license or permit required for the proper and lawful conduct of
MEDIFIT operation of the Premises. Except, the expense of the environmental health permit to
operate a pool issued by the County of San Diego, Department of Environmental Health shall be
paid by the CITY to the County of San Diego. MEDIFIT shall not use the Premises for any use
or purpose in violation of the laws of the United States of America, or the laws, ordinances,
regulations, orders or requirements of the State of California, the County of San Diego, the
CITY, or of other lawful authorities. MEDIFIT shall, at its expense, comply promptly with all
applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of
record, and requirements in effect during the Term (Laws or Orders), regulating the use by
MEDIFIT of the Premises.
25.5 Cumulative Remedies. In the event of a default under this Service Agreement, each
party's remedies shall be limited to those remedies set forth in this Service Agreement; any such
remedies are cumulative and not exclusive of any other remedies under this Service Agreement
to which the non -defaulting party may be entitled.
25.6 Entire Agreement. This Service Agreement, together with all addenda, exhibits and
riders attached hereto, constitutes the entire agreement between the parties with respect to the
subject matter hereof, and all prior or contemporaneous agreements, understandings and
representations, oral or written, are superseded.
25.7 Exhibits. All exhibits referred to herein are attached hereto and incorporated by
reference:
Exhibit A: Depiction of Las Palmas Pool
Exhibit B: Budget
25.8 Force Majeure. If either party is prevented or delayed from performing any act or
discharging any obligation hereunder, because of any and all causes beyond either party's
reasonable control, including unusual delays in deliveries, abnormally adverse weather
conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or
equipment, acts of God, governmental restrictions, regulations or controls, any hostile
government actions, civil commotion and fire or other casualty, legal actions attacking the
validity of this Service Agreement or the CITY or MEDIFIT operations of the Premises, or any
other casualties beyond the reasonable control of either party ("Force Majeure"), performance of
such act shall be excused for the period of such delay, and the period for performance of such act
shall be extended for a period equivalent to the period of such delay. Force Majeure shall not
include any bankruptcy, insolvency, or other financial inability on the part of either party hereto.
17
Service Agreement
Between City and MediFit
9-4-15
25.9 Governing Law. This Service Agreement shall be governed, construed and enforced in
accordance with the laws of the State of California.
25.10 Independent Contractor. MEDIFIT acknowledges that it is an independent contractor;
that it alone retains control of the manner of conducting its activities in furtherance of this
Service Agreement; and that it, as well as any persons, contractors or agents it may employ, are
not employees of CITY for any purpose.
25.11 Interpretation. The provisions of this Service Agreement shall be liberally construed to
effectuate its purpose. The language of all parts of this Service Agreement shall be construed
simply according to its plain meaning and shall not be construed for or against either party.
25.13 Modification. The provisions of this Service Agreement may not be modified, except by
a written amendment signed by both parties.
25.14 Partial Invalidity. If any provision of this Service Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Service Agreement
shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent
permitted by law.
25.15 Successors & Assigns. This Service Agreement shall be binding on and inure to the
benefit of the parties and their successors and assigns, except as may otherwise be provided
herein. MEDIFIT shall not assign this Service Agreement to any other party unless approved in
writing by CITY.
25.16 Time of Essence. Time is of the essence of each and every provision of this Service
Agreement.
25.17 Waiver. No provision of this Service Agreement or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is claimed.
IN WITNESS WHEREOF, the CITY and MEDIFIT have duly executed this Service Agreement
as of the day and year first above written.
18
Service Agreement
Between City and MediFit
9-4-15
CITY OF NATIONAL CITY
(CITY)
By:
Ron Morrison, Mayor
PPROVED AS TO FORM:
ii0tat‘ AA, t)
laudia Ga. tua Silva
City Attorn
19
MEDIFIT COMMUNITY SERVICES LLC
(MEDIFIT)
(Corporation — signatures of two corporate
officers required.)
By:
(Name)
Bill Bourque
(Print)
President, Account Management & Field
Operations
(Title)
(Name)
(Print)
RQ-52s.‘X(e-ACvvA r ceS
(Title)
Service Agreement
Between City and MediFit
9-4-15
EXHIBIT A
DEPICTION OF THE PREMISES
20
Service Agreement
Between City and MediFit
9-4-15
EXHIBIT B
BUDGET
FY16 FY17
Totals Totals
GRAND
TOTAL
Expenses
Payroll and Staffing Expenses
Salary -Managers $ 33,000 $ 66,000 $ 99,000
Wages -Guards for Recreational Swim & Lessons* $ 37,850 $ 76,330 $ 114,180
Wages -Administrative staff for recreational swim/public access $ 8,116 $ 8,724 $ 16,840
Wages -Learn to Swim Classes/Lessons* $ 8,417 $ 16,834 $ 25,250
Wages-Courses/Certification/Clinics-
Wages-Guards for Sweetwater Unified High School District programs $ 14,714 $ 35,448 $ 50,162
Wages -Guards for Southwestern College programs $ 14,714 $ 35,448 $ 50,162
Wages -Aquatic Group Exercise Classes $ 4,890 $ 13,008 $ 17,898
Payroll Burden-26% of payroll $ 31,642 $ 61,699 $ 93,341
Sub -Total $ 153,343 $ 313,491 $ 466,834
Marketing and Administrative Costs
Advertising & Marketing -Other $ 3,000 $ 6,000
Dues & Membership $ - $ 200
Meeting Expense (mandatory monthly staff meetings) $ 1,225 $ 2,450
Uniforms $ 500 $ 500
Locker Room Supplies $ 3,000 $ 6,000
Office Supplies & Expenses $ 900 $ 1,800
Travel -Mileage Reimbursement/Parking/Tolls $ 350 $ 350
Program Supplies & Expenses $ 1,500 $ 2,400
Sub -Total $ 10,475 $ 19,700
Base Management Fee $ 35,000 $ 60,000
$ 9,000
$ 200
$ 3,675
$ 1,000
$ 9,000
$ 2,700
$ 700
$ 3,900
$ 30,175
$ 95,000
Total Expenses $ 198,818 $ 393,191
Revenue
Recreational Swim $ $
Learn to Swim Classes/Lessons $ $
Courses/Certification/Clinics $ $
$ 592,009
Total Revenue
21
Service Agreement
Between City and MediFit
9-4-15
22
Service Agreement
Between City and MediFit
9-4-15
RESOLUTION NO. 2015 — 165
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE A 20-MONTH SERVICE AGREEMENT
BETWEEN THE CITY OF NATIONAL CITY AND MEDIFIT COMMUNITY SERVICES, LLC,
TO PROVIDE AQUATIC SERVICES AT LAS PALMAS POOL IN AN AMOUNT NOT TO
EXCEED $650,000; ESTABLISHING A GENERAL FUND COMMUNITY SERVICES
CONTRACT SERVICES APPROPRIATION OF $200,000 FOR MEDIFIT MANAGEMENT
FEES AND OPERATING COSTS; INCREASING THE GENERAL FUND COMMUNITY
SERVICES BUILDING SERVICES INTERNAL CHARGES APPROPRIATION BY UP TO
$144,300 TO ACCOUNT FOR GAS, ELECTRIC, WATER, AND CHEMICAL COSTS;
AND THE ESTABLISHING A GENERAL FUND REVENUE BUDGET
TO ACCOUNT FOR USER FEES IN THE AMOUNT OF $112,500
WHEREAS, the City of National City owns the real property commonly known as
Las Palmas Pool, located at 1800 East 22nd Street, National City (the "Premises"); and
WHEREAS, MediFit is a privately -held fitness and wellness management and
consulting company and is in the business of designing, managing, and operating all aspects of
mixed use health, fitness and aquatics centers similar to Las Palmas Pool; and
WHEREAS, the City desires to enter into an Agreement with MediFit for the
operation the Las Palmas Pool with MediFit programs serving the local community; and
WHEREAS, pursuant to the Agreement the City will be responsible for repair and
maintenance of the Premises, which includes improvements, landscaping, janitorial, facility
maintenance, chemical maintenance, and information technology; and
WHEREAS, MediFit will be responsible for the operation of the Premises, which
includes, personnel, programming, events, and operating procedures and policies; and
WHEREAS, an appropriation of $200,000 is necessary for this fiscal year to
cover MediFit's management fee and operating costs. The appropriation will be covered by a
General Fund fund balance where additional revenues would offset the cost to operate the pool;
and
WHEREAS, an increase to the Community Services Building Service internal
charges line item for up to $144,300 is required for the cost of utilities and chemicals associated
with the operation of Las Palmas Pool, and an equal decrease to the General Fund and Library
Fund Building Services internal charges line items, making it a net zero increase to the General
Fund.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the Mayor to execute a 20-month Service Agreement, with
MediFit Community Services, LLC, to provide aquatic services at Las Palmas Pool.
BE IT FURTHER RESOLVED that the City Council authorizes the establishment of
a General Fund Community Services Contract Services appropriation of $200,000.
BE IT FURTHER RESOLVED that the City Council authorizes an increase to the
General Fund Community Services Building Services internal charges appropriation by up to
$144,300.
Resolution No. 2015 — 165
Page Two
BE IT FURTHER RESOLVED that the City Council authorizes the establishment of
a General Fund revenue budget to account for user fees of $112,500.
PASSED and ADOPTED this 3rd day of Novembe 2015.
on Morrison, Mayor
ATTEST:
Ft,r4,,AP
l R. Dalla t Clerk
Micy
PPROVED AS TO FO' M:
.ia Gacitu. Silva
City Attorn -
Passed and adopted by the Council of the City of National City, California, on
November 3, 2015 by the following vote, to -wit:
Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY:
RON MORRISON
Mayor of the City of National City, California
/�_,LejA
of th
e
City City of VJational City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2015-165 of the City of National City, California, passed and
adopted by the Council of said City on November 3, 2015.
City Clerk of the City of National City, California
By:
Deputy
CITY OF NATIONAL CITY, CALIFORNIA
COUNCIL AGENDA STATEMENT
Ca0t5-GO
MEETING DATE: November 3, 2015
AGENDA ITEM NO. 12
�ITEM TITLE:
Resolution of the City Council of the City of National City authorizing, 1) the Mayor to execute a 20 month Service Agreement,
between the City of National City and MediFit Community Services LLC to provide aquatic services at Las Palmas Pool in an
amount not to exceed $650,000; 2) the establishment of a General Fund Community Services Contract Services appropriation of
$200,000 for MediFit management fees and operating costs; 3) an increase of the General Fund Community Services Building
Services internal charges appropriation by up to $144,300 to account for gas, electric, water, and chemical costs; 4) and the
establishment of a General Fund revenue budget to account for user fees of $112,500. (Community Services)
PREPARED BY: Audrey Denham
PHONE: 619-336-4243
EXPLANATION:
See attached staff report.
DEPARTMENT: Comm ity Services
APPROVED BY:
FINANCIAL STATEMENT:
ACCOUNT NO.
Expenditure Account Numbers
001-418-058-299-0000: $200,000 (Contract Services)
001-418-058-740-0000: $144,300 (Building Services Charges)
ENVIRONMENTAL REVIEW:
N/A
ORDINANCE: INTRODUCTION:
APPROVED:
APPROVED:
Revenue Account Number
001-41000-3312 (Recreation Rental Revenue) $112,500
FINAL ADOPTION:
Finance
MIS
STAFF RECOMMENDATION:
See attached staff report.
BOARD / COMMISSION RECOMMENDATION:
N/A
ATTACHMENTS:
1. Staff Report
2. Draft Lease Agreement
\\0\Z N0 • ';,
Staff Report
Resolution of the City Council of the City of National City authorizing, 1) the Mayor to execute
a 20 month Service Agreement, between the City of National City and MediFit Community
Services LLC to provide aquatic services at Las Palmas Pool in an amount not to exceed
$650,000; 2) the establishment of a General Fund Community Services Contract Services
appropriation of $200,000 for MediFit management fees and operating costs; 3) an increase of
the General Fund Community Services Building Services internal charges appropriation by up
to $144,300 to account for gas, electric, water, and chemical costs; 4) and the establishment of
a General Fund revenue budget to account for user fees of $112,500.
Financial Summary for FY16
First, an appropriation of $200,000 will be needed for this fiscal year to cover MediFit's
management fee and operating costs. The FY16 appropriation of $200,000 will be covered by
a General Fund fund balance where additional revenues would offset the cost to operate the
pool.
MediFit Management Fee
MediFit Operating Costs
$ 35,000
$ 165,000
$ 200,000
Second, there will be an increase to the Community Services Building Service internal
charges line item for up to $144,300 for utilities and chemicals associated with the operation
of Las Palmas Pool. There will be an equal decrease to the General Fund and Library Fund
Building Services internal charges line items, making it a net zero increase to the General
Fund.
Electric $ 40,000
Gas $ 40,000
Water $ 14,000
Chemicals $ 50,300
$ 144,300
Third, revenues generated from Southwestern College (SWC) and Sweetwater Unified High
School District (SUHSD) for pool user fees will be submitted directly to the City. For FY16,
SWC has received board approval to pay user fees of $62,500; SUHSD will be requesting
board approval for user fees of $50,000 on October 25, 2015.
SWC $ 62,500
SUHSD $ 50,000
$ 112,500
The appropriation of $200,000 is offset by $112,500 in revenue collected from SWC and
SUHSD, making the net increased cost to the City for FY16 $87,500.
Financial Summary for FY17
For FY17, SWC has received board approval to pay user fees of $125,000; SUHSD will be
requesting board approval for user fees of $100,000 on October 25, 2015. The following table
summarizes revenues and expenses for the operation of Las Palmas Pool by MediFit in
FY17:
Revenue
Southwestern College
Sweetwater Union High School District
Total Revenue
$ 125,000
$ 100,000
$ 225,000
Expenditures
Utilities (gas, electric & water) $ 185,000
Chemicals $ 65,000
MediFit Management Fee $ 60,000
MediFit Operating Costs $ 334,000
Total Expenses $ 644,000
During the FY17 budget development process staff will include the above revenue of
$225,000 and expenditures of $644,000 as part of the proposed budget for City Council
approval. Assuming the cost of utilities and chemicals were approved each year the increase
to the FY17 budget would be $394,000. This increase is offset by $225,000 in revenue for a
net increased cost of $169,000.
Capital Investment
The City will purchase necessary capital and recreation equipment for the operation of the
pool, which is approximately $80,000. Of this amount, $60,000 would be funded from the
appropriation of $189,525.66 from the YMCA, which is currently budgeted in the Las Palmas
Park Improvements account. Approximately $20,000 is for recreation equipment and will
come out of the General Fund Community Services budget and an appropriation request will
be made during the FY16 midyear process.
Agreement Summary
Term, Option to Extend and Transition Period. The term of the agreement shall be for 20
months beginning November 4, 2015 and terminating on June 30, 2017. The City and MediFit
may mutually agree to extend the term of the agreement for up to two additional one year
terms. A request for an extension to the term must be requested no less than nine months
prior to the end of the term and mutual agreement must be reached no less than six months
prior to the end of the term. Should the City or MediFit decide not to extend the agreement
within the timeframe above, MediFit will work with the City to transition the operations to the
City over the six month period preceding the end of the term.
Not to Exceed Amount. MediFit agrees that the management fee and operating costs, shall
not exceed a total of $650,000 over the term of the agreement.
Utility Services. The City shall be responsible for maintaining, providing and paying for utility
services, including but not limited to gas, water, electricity, trash, sewer charges and
telephone.
CITY Repair and Maintenance Obligations. The City shall, at its own cost and expense, repair
and maintain the premises. The City is responsible for all repair and maintenance including
landscape, janitorial, and facility maintenance.
Programs. MEDIFIT shall provide the following proposed activities:
• Open Swim on Saturday and Sunday throughout the year and open swim seven days
a week during the months of June, July and August; as well as during the National
School District two week fall break that occurs during September and/or October. In
addition, consideration based on need will be given for an expanded open swim
schedule during the National School District two week winter and spring breaks.
• Learn to swim classes throughout the year based on community needs. The number of
classes offered will increase during the months of June, July and August. A variety of
learn to swim classes for youth and adults with varying levels of experience will be
offered.
• Exercise classes for various ages and abilities and offered based on community
needs.
City Residents. Participants seeking day use of the premises who prove to MediFit's
satisfaction that they are residents of the City shall not be required to become members of
MediFit and shall be offered reduced resident rates.
Third Party Rental Groups. The City will separately collect rental revenue from third party
rental groups. MediFit shall allow all City approved third party rental groups to use the
premises and shall give priority use to City requests for either third party rental groups or City
use for events.
Marketing. MediFit will work closely with the City and the Community Services Department in
designing and implementing effective and low cost program marketing campaigns, including
community outreach to find programming opportunities. MediFit will develop and launch
outdoor fitness and program initiatives.
Needs Assessment. MediFit will assist the City with a needs assessment for the premises,
which includes, but is not limited to, providing analysis and recommendations to improve
operations and collecting input from the community through survey's and community
meetings.
Staff Recommendation
Adopt the resolution authorizing, 1) the Mayor to execute a 20 month Service Agreement, with
MediFit Community Services LLC to provide aquatic services at Las Palmas Pool; 2) establish
a General Fund Community Services Contract Services appropriation of $200,000; 3) increase
the General Fund Community Services Building Services internal charges appropriation by up
to $144,300; 4) establish a General Fund revenue budget to account for user fees of $112,500.
SERVICE AGREEMENT
BY AND BETWEEN
THE CITY OF NATIONAL CITY
AND
MEDIFIT COMMUNITY SERVICES LLC
FOR THE OPERATION OF LAS PALMAS POOL
This Service Agreement (this "Service Agreement") is entered into by and between the CITY OF
NATIONAL CITY, a municipal corporation (the "CITY"), and MEDIFIT COMMUNITY
SERVICES LLC, a limited liability company ("MEDIFIT").
RECITALS
A. The CITY owns the real property commonly known as Las Palmas Pool, located at 1800
E. 22nd Street, National City, California (the "Premises") as depicted on Exhibit A.
B. MEDIFIT is a privately -held fitness and wellness management and consulting company
and is in the business of designing, managing and operating all aspects of mixed use
health, fitness and aquatics centers similar to Las Palmas Pool.
C. The CITY wishes to have MEDIFIT operate the Las Palmas Pool with MEDIFIT
programs serving the local community.
D. The CITY is responsible for repair and maintenance of the Premises, which includes
improvements, landscaping, janitorial, facility maintenance, chemical maintenance and
information technology. The City desires to engage MEDFIT to operate of the Premises,
which includes, personnel, programming, events and operating procedures and policies.
NOW, THEREFORE, in consideration of the foregoing facts, and in consideration of the
promises and covenants hereinafter set forth, the parties agree as follows:
ARTICLE 1
TERM OF AGREEMENT
1.1 Term. The term of this Service Agreement shall be for twenty (20) months beginning
November 4, 2015 (the "Commencement Date") and terminating on June 30, 2017 (such period,
the "Term").
1.2 Option to Extend Term. This Service Agreement may be extended upon mutual
agreement between the parties. If either party desires an extension, the requesting party must
make the request for an extension to the Term no less than nine (9) months prior to the end of the
Term and mutual agreement must be reached no less than six (6) months prior to the end of the
Term. At the time of an extension request, MEDIFIT and the CITY shall discuss a mutually
agreed upon scope of work for the extended Term. The CITY and MEDIFIT may mutually agree
to extend the Term of this Service Agreement for up to two (2) additional one (1) year terms.
1
Service Agreement
Between City and MediFit
9-4-15
1.3 Transition Period. Should the CITY or MEDIFIT decide not to extend this Service
Agreement within the timeframe above, MEDIFIT will work with the CITY to transition the
operations to the CITY over the six (6) month period preceding the end of the Term of this
Service Agreement.
ARTICLE 2
PREMISES AND PERSONAL PROPERTY
2.1 Facilities to be Operated. For the purpose of operating the Premises for the benefit of the
citizens of National City, the CITY hereby engages MEDIFIT to operate the Premises, subject to
the covenants and conditions hereinafter set forth, on the Commencement Date. Facilities to be
operated include the main pool, the activity pool, the locker rooms, main pump and storage
rooms and the main lobby and administrative offices (the "Facilities"). The main pool is 50
meters by 19.8 meters, with Blanes of 50 meters, including one 3 meter diving board and two 1
meter diving boards. The activity pool is 80 feet long and at its widest it is 45 feet wide with a
total area of 81,000 square feet; it has 4 different spray features and a 16 foot high slide with a
ride length of 134.58 feet. The locker rooms are enclosed by a high wall and have a large
changing area, showers and restrooms. There is a main pump room adjacent to the pool along
with multiple storage rooms. There is also a main lobby and administrative offices.
2.2 Ownership of Personal Property and Improvements. The rights and obligations of the
parties regarding the ownership of personal property and improvements on the Premises shall be
as follows:
2.2.1 All of the CITY's personal property not permanently affixed to the Premises
("Personal Property"), such as but not limited to, furnishings, office equipment and
supplies shall remain the property of the CITY. All improvements existing on the
Premises ("Improvements"), together with all fixtures permanently attached to the
Premises ("Fixtures"), as of the Commencement Date shall remain the property of the
CITY during the Term. MEDIFIT shall not remove any Personal Property,
Improvements, or Fixtures from the Premises nor waste, destroy, or modify any Personal
Property, Improvements, or Fixtures on the Premises. All new Improvements, together
with all new Fixtures permanently attached to the Premises, after the Commencement
Date shall remain the property of the CITY during the Term. MEDIFIT shall not remove
any of the CITY's Personal Property, Improvements, or Fixtures from the Premises nor
waste, destroy, or modify any Personal Property, Improvements, or Fixtures on the
Premises.
2.2.2 All of MEDIFIT's personal property not permanently affixed to the Premises shall
remain the property of MEDIFIT.
ARTICLE 3
PERMITTED USE
2
Service Agreement
Between City and MediFit
9-4-15
3.1 Permitted Uses. MEDIFIT shall operate the Premises by providing for and facilitating
the following proposed activities beginning January 2016, which may be amended or replaced
from time -to -time by agreement of the authorized representatives of the parties:
3.1.1 Open Swim on Saturday and Sunday throughout the year and open swim seven
(7) days a week during the months of June, July and August; as well as during the
National School District two (2) week fall break that occurs during September and/or
October. In addition, consideration based on need will be given for an expanded open
swim schedule during the National School District two (2) week winter and spring
breaks.
3.1.2 Learn to swim classes throughout the year based on community needs. The
number of classes offered will increase during the months of June, July and August. A
variety of learn to swim classes for youth and adults with varying levels of experience
will be offered. Cancelation of classes is permitted if enrollment is under three (3)
participants.
3.1.3 Exercise classes for various ages and abilities and offered based on community
needs. Cancelation of classes is permitted if enrollment is under five (5) participants.
3.2 Hours of Service. MEDIFIT may provide programming between the hours of 7:00 a.m.
and 10:00 p.m. seven (7) days a week beginning January 2016. Hours of service may be changed
upon mutual agreement.
3.2 CITY Use. The City may use the Premises for special events including National Night
Out and Summer Movies in the Park. The CITY may use the Premises for up to ten (10)
additional events or programs per year. Dates and times of such uses will be agreed upon by the
CITY and MEDIFIT.
3.3 Consideration. MEDIFIT' s performance under this Service Agreement shall serve as the
sole consideration due to the CITY for MEDIFIT' s right to operate the Premises.
3.4 CITY Residents. Participants seeking day use of the Premises who prove to MEDIFIT's
satisfaction that they are residents of the CITY shall not be required to become members of
MEDIFIT and shall be offered reduced resident rates.
ARTICLE 4
SERVICES
4.1 MEDIFIT shall render the management services listed below (the "Services") to the
CITY for the on -site management and supervision of the Premises. The Services shall be
performed in accordance with generally accepted standards in the fitness and wellness
management industry and shall be performed in accordance with such requirements or
restrictions as may be imposed by any government authority. MEDIFIT shall provide the
Services as follows:
3
Service Agreement
Between City and MediFit
9-4-15
4.1.1 MEDIFIT has formulated an annual budget in accordance with financial targets
for net operating income/surplus and meeting agreed upon benchmarks as set forth in
Exhibit B attached hereto and incorporated herein. The budget is mutually agreed upon
by the CITY and MEDIFIT.
4.1.2 MEDIFIT shall endeavor to meet or exceed the revenue goals as set forth in
Exhibit B through the development and execution of effective marketing and retention
plans.
4.1.3 MEDFIT shall provide learn to swim classes, open swim and other programs at
affordable resident rates approved by the City.
4.1.4 MEDIFIT shall endeavor to meet or exceed budgeted net operating
income/surplus goals as set forth in Exhibit B. Financial results will be monitored by and
reviewed with the CITY on a monthly, quarterly and annual basis.
4.1.5 MEDIFIT shall provide quarterly reports to the City denoting National City
participant numbers, total participant numbers, events and programs coordinated, total
use by third parties, such as athletic teams, and any other pertinent statistics.
4.1.6 MEDIFIT shall recruit, hire and employ, as employees of MEDIFIT, all persons
who will work at, or provide services to the Premises, managed by MEDIFIT in
furtherance of the CITY operations (all such persons being referred to herein, collectively
as "Managed Personnel"). Salaries and other expenses of Managed Personnel will be
charged to CITY as an operating expense only to the extent such Managed Personnel are
actually employees of MEDIFIT.
Both parties hereto in the performance of this Service Agreement will be acting in an
independent capacity and not as agents, employees, partners, or joint venturers with one
another. Neither MEDIFIT nor, to MediFit's knowledge, MEDIFIT'S employees are
employees of the CITY, and are not entitled to any of the rights, benefits, or privileges of
the CITY'S employees, including but not limited to retirement, medical, unemployment,
or workers' compensation insurance.
This Service Agreement contemplates the personal services of MEDIFIT and
MEDIFIT'S employees, and it is recognized by the parties that a substantial inducement
to the CITY for entering into this Service Agreement was, and is, the professional
reputation and competence of MEDIFIT and its employees. Neither this Agreement nor
any interest herein may be assigned by MEDIFIT without the prior written consent of the
CITY. Nothing herein contained is intended to prevent MEDIFIT from employing or
hiring as many employees as MEDIFIT may deem necessary for the proper and efficient
performance of this Service Agreement. All agreements by MEDIFIT with third parties
shall require the third party to adhere to the applicable terms of this Service Agreement.
4
Service Agreement
Between City and MediFit
9-4-15
4.1.7 MEDIFIT will manage personnel, facilities and programs/services in a manner
consistent with the mission and values of the CITY. MEDIFIT will provide personnel as
it deems reasonably necessary to perform the Services set forth in this Service
Agreement. Personnel will be trained by MEDIFIT to properly perform the Services.
MEDIFIT will present the CITY with General Manager candidates for review prior to
hiring. The CITY will have the right to disapprove of the General Management
candidates.
4.1.8 MEDIFIT will establish and implement policies and procedures designed to
operate the Premises in a manner that promotes safety, customer service and financial
accountability.
4.1.9 MEDIFIT will work closely with the CITY and the Community Services
Department in designing and implementing effective and low cost program marketing
campaigns, including community outreach to find programming opportunities. MEDIFIT
will develop and launch outdoor fitness and program initiatives.
4.1.9.1 Use by Others. MEDIFIT may allow use of the Premises to other groups
or organizations such as athletic teams/clubs. Any third party group users such as
athletic teams/clubs shall be required to obtain a facility use permit from the
CITY, and shall pay fees to the CITY for their use of the Premises.
4.1.10 MEDIFIT will develop and enhance measurement and analytics capabilities to
help optimize revenue.
4.1.11 MEDIFIT will assist the CITY with a needs assessment for the Premises, which
includes, but is not limited to, providing analysis and recommendations to improve
operations and collecting input from the community through survey's and community
meetings.
ARTICLE 5
EQUIPMENT
5.1 The CITY will be solely responsible for providing and equipping the Premises
(including, without limitation, Automatic External Defibrillators) so that the Services may be
rendered by MEDIFIT in accordance with this Service Agreement and in compliance with all
applicable rules and regulations relating to the Premises and the Services. The CITY shall
provide such items as office furniture and equipment, telephones, computers and software for the
Premises. The CITY will also be responsible for purchasing or leasing all aquatic related
exercise equipment and safety and first aid equipment necessary to operate the Premises as
reasonably requested by MEDIFIT. The CITY also agrees to, at its sole expense, maintain such
equipment to the best of their ability. The CITY will consider the nature and priority of the
maintenance and available funding to determine if and when such repairs and maintenance will
be completed.
5
Service Agreement
Between City and MediFit
9-4-15
5.2 MEDFIT shall, provide general administrative supplies and marketing materials
necessary for the operation of the Premises at the City's sole cost and expense. The City shall
pay for such supplies and materials within thirty (30) days of receipt of MEDIFIT' s invoice
therefor. MEDIFIT shall prepare and distribute marketing materials and CITY shall assist with
the distribution of marketing materials.
ARTICLE 6
UTILITIES
6.1 Utility Services. The CITY shall be responsible for maintaining utility services to the
Premises, and shall provide and pay for all utilities or services necessary for its use and operation
of the Premises during the Term, including but not limited to gas, water, electricity, trash, sewer
charges and telephone. The CITY shall pay directly to the applicable utility company such
charges, and MEDIFIT shall have no obligation to pay for such utility services.
ARTICLE 7
REPAIRS; MAINTENANCE
7.1 CITY Repair and Maintenance Obligations. The CITY shall, at its own cost and expense,
repair, maintain in good and tenantable condition, ordinary wear and tear excepted, and replace,
as necessary, the Premises. The CITY is responsible for all repair and maintenance including but
not limited to, landscape maintenance, janitorial maintenance and facility maintenance. The
CITY shall work with MEDIFIT to maintain public safety, hygiene and fire safety of the
Premises. The CITY shall consider the nature and priority of the work and available funding to
determine if and when such repairs and maintenance will be completed.
7.1.1 Landscape Maintenance. The CITY is responsible for all outdoor cleaning and
landscape maintenance at the Premises.
7.1.2 Janitorial Maintenance. The CITY is responsible for janitorial maintenance at the
Premises, including but not limited to, routine cleaning of office, lobby, restrooms and
locker rooms which includes waste removal, window cleaning, sweeping and mopping
floors, and dusting and wiping counters and surfaces. The CITY is responsible for
stocking janitorial items such as toiletries and cleaning supplies. The CITY has sole
discretion on the frequency of cleaning and amount of janitorial items stocked.
7.1.3 Facility Maintenance. The CITY is responsible for all facility maintenance,
including but not limited to, electrical, lighting, plumbing, pool chemicals, paint,
flooring, HVAC systems and heat and air conditioning.
7.1.4 Information Technology. The CITY is responsible for providing interne access,
telephones and support services.
7.2 MEDIFIT Repair and Maintenance Obligations. MEDFIT shall operate the Premises in a
manner that promotes the safety and security of the public while MEDFIT personnel is on the
Premises. Safety and security issues must be reported to the designated CITY contact promptly
6
Service Agreement
Between City and MediFit
9-4-15
and MEDIFIT personnel will endeavor to protect the safety and security of the public until the
CITY can address the safety and/or security issue.
Except for normal wear and tear occurring in the ordinary course of business, MEDIFIT agrees
to repair or replace any damage or injury done to the Premises, or Personal Property, or any part
thereof, caused by MEDIFIT or MEDIFIT's agents, employees or invitees, at MEDIFT's own
cost and expense. If MEDIFIT fails to make such repairs or replacements promptly, CITY may,
at its option, make such repairs or replacements, and MEDIFIT shall repay the cost thereof to the
CITY within ten (10) days of written demand. However, for any repair work, costing over Five
Hundred and no/100 Dollars ($500.00) to be performed by MEDIFIT or MEDIFIT's agents,
MEDIFIT shall not perform such repair work without the CITY's prior written consent. Any
repairs or replacements in or to the Premises, other than repair work in emergency situations,
which would require an expenditure exceeding Five Thousand and no/100 Dollars ($5,000.00)
and which constitute a "public project" under Section 20161 of the California Public Contract
Code, shall be contracted for/by CITY and let to the lowest responsible bidder after notice.
7.3 CITY Right to Inspect. MEDIFIT shall permit the CITY to enter the Premises at all
times to inspect the Premises, provided, however, that such entry shall not unreasonably interfere
with MEDIFIT's operation of the Premises. Nothing contained in this Article 7, however, shall
be construed as creating any duty on the part of the CITY to do any work which, under any
provision of this Agreement, MEDIFIT may be required to do.
7.4 Prevailing Wages. MEDIFIT shall, pay prevailing wages if required by law for work
performed on the Premises.
ARTICLE 8
FEES AND PAYMENT TERMS
8.1 Fees. The CITY shall pay MEDIFIT a monthly base management fee, actual payroll and
staffing expenses and marketing and administrative costs as set forth in this Article 8.1 and
Exhibit B.
8.1.1 Base Management Fee. As compensation for the Services, the CITY shall pay
MEDIFIT a monthly base management fee (the "Base Management Fee") for each month
beginning November 4, 2015 (prorated for any partial months at the beginning or end of
the Term) in the amount of $5,000 per month throughout the Term and the Base
Management Fee shall be invoiced monthly. The Base Management Fee shall be due
thirty (30) days after receipt of invoice therefor.
8.1.2 Payroll and Staffing Expenses. MEDIFIT shall recruit, hire and employ, as
employees of MEDIFIT, all persons who will work at, or provide services at the
Premises. Monthly payroll and staffing expenses are estimated as set forth in Exhibit B
and will be charged to the CITY as an operating expense only to the extent such Managed
Personnel are actually employees of MEDIFIT.
7
Service Agreement
Between City and MediFit
9-4-15
8.1.3 Marketing and Administrative Costs. MEDFIT shall, provide such items as
general administrative supplies and marketing materials necessary for the operation of the
Premises. Monthly marketing and administrative costs are estimated as set forth in
Exhibit B and the cost of the marketing materials and the administrative supplies shall be
paid for by the City within thirty (30) days after receipt of an invoice setting forth the
amount of such costs.
8.2 Payment Terms. The CITY shall pay MEDIFIT ninety percent (90%) of the estimated
monthly operating expenses as set forth in Exhibit B on or before the first (1st) day of every
month. At the end of the month MEDIFIT shall submit an invoice for the remaining balance due.
8.2.1 90% Monthly Payment. Commencing on December 1, 2015 the CITY will pay to
MEDIFIT, on or before the first (1st) day of every month, an amount equal to ninety
percent (90%) of MEDIFIT's budgeted monthly Base Management Fee, estimated
payroll and staffing expenses, and estimated marketing and administrative costs, as set
forth in Exhibit B. The initial payment shall be payable on the first (1st) day of December
2015. The remainder of the actual monthly payment shall be paid as set forth in 8.1.3.
8.1.3 Monthly Balance Due Payment. MEDIFIT shall submit an invoice for the
remaining balance due each month in which Services are rendered. To the extent
applicable, each invoice will reflect the monthly Base Management Fee, actual payroll
and staffing expenses and actual marketing and administrative costs together with all
amounts payable to MEDIFIT as set forth in Exhibit B, less any payments or revenue
received during the month in which Services are rendered. Upon request, MEDIFIT shall
submit to the CITY supporting documentation for payroll and staffing expenses and
marketing and administrative costs. Supporting documentation may be, but is not limited
to, copies of payroll and receipts for purchases.
8.3 Not to Exceed Amount. MEDIFIT agrees that the combined base management fee,
payroll and staffing fees, and marketing and administrative costs, shall not exceed a total of
$650,000 over the Term of this Agreement. Should the parties agree to extend the Service
Agreement, Article 8.3 must be negotiated and mutually agreed upon.
8.4 Third Party Rental Groups. The CITY will separately collect and retain rental revenue
from third party rental groups. MEDIFIT shall allow all CITY approved third party rental groups
to use the Premises and shall give priority use to CITY requests for either third party rental
groups or CITY use for events.
8.5 Revenue Collected by MEDIFIT. Revenue collected by MediFit for its programing of
open swim, learn to swim, and exercise classes will be collected and handled by MEDIFIT.
MEDIFIT shall submit daily cash receipts to the CITY each month with the monthly balance due
invoice.
8.6 Notwithstanding any other provision contained herein, in the event that CITY's
outstanding balance for fees and charges to MEDIFIT is greater than ninety (90) days past due,
MEDIFIT will have the right to immediately and unilaterally terminate this Agreement.
8
Service Agreement
Between City and MediFit
9-4-15
8.7 The CITY shall be responsible for all sales, use and excise taxes, and any other similar
taxes, duties and charges of any kind imposed by any federal, state or local governmental entity
on any amounts payable by the CITY hereunder.
ARTICLE 9
TAXES
9.1 Definition. "Taxes" shall mean all taxes, governmental bonds, special assessments,
charges, or transfer taxes, license and transaction fees, including, but not limited to, (i) any state,
local, federal income tax, or any real or personal property tax, (ii) increases in taxes attributable
to MEDIFIT's operation of the Premises, or (iii) any taxes which are essentially payments to a
governmental agency, other than the CITY, for the right to make improvements to the Premises.
MEDIFIT recognizes and agrees that this agreement may create a possessory interest subject to
property taxation and that MEDIFIT may be subject to the payment of taxes levied on such
interest. MEDIFIT agrees to pay, before delinquency, all taxes, assessments and fees assessed or
levied upon the Premises.
9.2 Responsibility for Payment of Taxes. The CITY shall not be obligated to pay any Taxes
accruing against MEDIFIT.
ARTICLE 10
INDEMNIFICATION AND INSURANCE
10.1 MEDIFIT's Indemnity. MEDIFIT agrees to defend, indemnify and hold harmless the
City of National City, its officers and employees, against and from any and all liability, loss,
damages to property, injuries to, or death of any person or persons, and all claims, demands,
suites, actions, proceedings, reasonable attorneys' fees, and defense costs, of any kind or nature,
including workers' compensation claims, of or by anyone whomsoever, resulting from or arising
out of the MEDIFIT'S performance or other obligations under this Agreement; provided,
however, that this indemnification and hold harmless shall not include any claims or liability
arising from the established sole negligence or willful misconduct of the CITY, its agents,
officers, or employees. The indemnity, defense, and hold harmless obligations contained herein
shall survive the termination of this Operating Agreement for any alleged or actual omission, act,
or negligence under this Operating Agreement that occurred during the term of this Operating
Agreement.
10.2 Insurance. MEDIFIT, at its sole cost and expense, shall purchase and maintain, and shall
require its subcontractors, when applicable, to purchase and maintain throughout the term of this
Service Agreement, the following checked insurance policies:
A. ® If checked, Professional Liability Insurance (errors and
omissions) with minimum limits of $1,000,000 per occurrence.
B. Automobile Insurance covering all bodily injury and property damage
incurred during the performance of this Agreement, with a minimum coverage of $1,000,000
combined single limit per accident. Such automobile insurance shall include owned, non -owned,
and hired vehicles ("any auto"). The policy shall name the CITY and its officers, agents and
9
Service Agreement
Between City and MediFit
9-4-15
employees as additional insureds, and a separate additional insured endorsement shall be
provided.
C. Commercial General Liability Insurance, with minimum limits of
$5,000,000 per occurrence and $10,000,000 aggregate, covering all bodily injury and property
damage arising out of its operations under this Service Agreement. The policy shall name the
CITY and its officers, agents and employees as additional insureds, and a separate additional
insured endorsement shall be provided. The general aggregate limit must apply solely to this
"project" or "location".
D. Workers' Compensation Insurance in an amount sufficient to meet
statutory requirements covering all of MEDIFIT' S employees and employers' liability insurance
with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a
waiver of subrogation in favor of the City. Said endorsement shall be provided prior to
commencement of work under this Service Agreement.
If MEDIFIT has no employees subject to the California Workers'
Compensation and Labor laws, MEDIFIT shall execute a Declaration to that effect. Said
Declaration shall be provided to MEDIFIT by CITY.
E. The aforesaid policies shall constitute primary insurance as to the CITY,
its officers, employees, and volunteers, so that any other policies held by the CITY shall not
contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior
written notice to the CITY of cancellation or material change.
F. If required insurance coverage is provided on a "claims made" rather than
"occurrence" form, the MEDIFIT shall maintain such insurance coverage for three years after
expiration of the term (and any extensions) of this Service Agreement. In addition, the "retro"
date must be on or before the date of this Service Agreement.
G. Insurance shall be written with only California admitted companies that
hold a current policy holder's alphabetic and financial size category rating of not less than A VIII
according to the current Best's Key Rating Guide, or a company equal financial stability that is
approved by the CITY'S Risk Manager. In the event coverage is provided by non -admitted
"surplus lines" carriers, they must be included on the most recent California List of Eligible
Surplus Lines Insurers (LESLI list) and otherwise meet rating requirements.
H. This Service Agreement shall not take effect until certificate(s) or other
sufficient proof that these insurance provisions have been complied with, are filed with and
approved by the CITY' S Risk Manager. If the MEDIFIT does not keep all of such insurance
policies in full force and effect at all times during the terms of this Service Agreement, the CITY
may elect to treat the failure to maintain the requisite insurance as a breach of this Service
Agreement and terminate the Service Agreement as provided herein.
I. All deductibles and self -insured retentions in excess of $10,000 must be
disclosed to and approved by the CITY.
ARTICLE 11
TERMINATION
11.1 This Service Agreement may be terminated with or without cause by the CITY.
Termination without cause shall be effective only upon 60-day's written notice to MEDIFIT.
During said 60-day period MEDIFIT shall perform all services in accordance with this Service
Agreement. This Service Agreement may also be terminated immediately by the CITY for cause
10
Service Agreement
Between City and MediFit
9-4-15
in the event of a material breach of this Service Agreement, misrepresentation by MEDIFIT in
connection with the formation of this Service Agreement or the performance of services, or the
failure to perform services as directed by the CITY. Termination with or without cause shall be
effected by delivery of written Notice of Termination to MEDIFIT as provided for herein. The
CITY further reserves the right to immediately terminate this Service Agreement upon: (1) the
filing of a petition in bankruptcy affecting MEDIFIT; (2) a reorganization of MEDIFIT for the
benefit of creditors; or (3) a business reorganization, change in business name or change in
business status of MEDIFIT.
11.2 This Service Agreement may be terminated by MEDIFIT by notice to the CITY, at any
time if (1) the CITY becomes insolvent or admits its inability to pay its debts generally as they
become due, (2) the CITY becomes subject, voluntarily or involuntarily, to any proceeding under
any domestic or foreign bankruptcy or insolvency law, which is not fully stayed within seven (7)
days or is not discussed or vacated within forty-five (45) days after filing, (3) the CITY is
dissolved or liquidated or takes any action for such purpose, (4) the CITY makes a general
assignment for the benefit of creditors, or (5) the CITY has a receiver, trustee, custodian or
similar agent appointed by order of any court of competent jurisdiction to take charge of or sell
any material portion of its property or business.
11.3 Upon termination of this Agreement, within thirty (30) days of the termination MEDIFIT
shall return to the CITY all property of the CITY, and MEDIFIT shall remove all property of
MEDIFIT at MEDIFIT's expense.
ARTICLE 12
HAZARDOUS MATERIALS
12.1 Hazardous Materials Laws -Definition. As used in this Article, the term "Hazardous
Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees,
orders, regulations or court decisions (including the so-called "common law"), including without
limitation the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C., sec.9601 et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C., sec.1801 et seq.), and the Resource Conservation and Recovery Act of
1986, as amended (42 U.S.C., sec. 6901 et seq.), relating to hazardous substances, hazardous
materials, hazardous waste, toxic substances, environmental conditions on, under or about the
Premises, soil and ground water conditions or other similar substances or conditions.
12.2 Hazardous Materials - Definition. As used in this Section the term "Hazardous
Materials" means any chemical, compound, material, substance or other matter that:
12.2.1 is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine,
bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material,
whether injurious or potentially injurious by itself or in combination with other materials;
11
Service Agreement
Between City and MediFit
9-4-15
12.2.2 is controlled, referred to, designated in or governed by any Hazardous Materials
Laws;
12.2.3 gives rise to any reporting, notice or publication requirements under any
Hazardous Materials Laws, or
12.2.4 is any other material or substance giving rise to any liability, responsibility or
duty upon the CITY or MEDIFIT with respect to any third person under any Hazardous
Materials Law.
12.3 MEDIFIT Representations and Warranties. MEDIFIT represents and warrants that,
during the Term or any extension thereof, MEDIFIT shall comply with the following provisions
of this Section unless otherwise specifically approved in writing by CITY, subject to the terms
and conditions of MEDIFIT maintenance obligations provided elsewhere in this Service
Agreement:
12.3.1 MEDIFIT shall not cause or authorize any Hazardous Materials to be brought,
kept or used in or about the Premises by MEDIFIT, its agents, employees, assigns,
contractors or invitees, except as required by MEDIFIT's permitted use of the Premises in
the normal course of operations;
12.3.2 Any handling, transportation, storage, treatment or usage by MEDIFIT of
Hazardous Materials that is to occur on the Premises following the Commencement Date
shall be in compliance with all applicable Hazardous Materials Laws;
12.3.3 Any leaks, spills, release, discharge, emission or disposal of Hazardous Materials
which may occur on the Premises following the Commencement Date shall be promptly
reported in writing to CITY;
12.3.4 No friable asbestos shall be constructed, placed on, deposited, stored, disposed of,
or located by MEDIFIT in the Premises;
12.3.5 No underground improvements, including but not limited to treatment or storage
tanks, or water, gas or oil wells shall be located by MEDIFIT on the Premises without
CITY's prior written consent;
12.3.6 MEDIFIT shall promptly supply the CITY with copies of all notices, reports,
correspondence, and submissions made by MEDIFIT to the United States Environmental
Protection Agency, the United Occupational Safety and Health Administration, and any
other local, state or federal authority which requires submission of any information
concerning environmental matters or hazardous wastes or substances pursuant to
applicable Hazardous Materials' Laws with respect to the Premises; and
12.3.7 MEDIFIT shall promptly notify the CITY of any liens threatened or attached
against the Premises pursuant to any Hazardous Materials' Law.
ARTICLE 13
ASSIGNMENT
12
Service Agreement
Between City and MediFit
9-4-15
13.1 CITY's Consent Required. MEDIFIT shall not voluntarily or involuntarily assign or
otherwise transfer all or any portion of its rights and duties under this Agreement without the
CITY's prior written consent. Any attempted assignment or transfer without the CITY's prior
written consent shall be void.
ARTICLE 14
DEFAULTS BY MEDIFIT; REMEDIES
14.1 Events of Default; Remedies. If MEDIFIT neglects or fails to perform or observe any of
its obligations under the terms, covenants, or conditions contained in this Service Agreement
within thirty (30) days after written notice of default or, when more than thirty (30) days shall be
required because of the nature of the default, if MEDIFIT fails to cure such default after written
notice thereof, then MEDIFIT shall be liable to the CITY for any and all damages sustained by
the CITY as a result of MEDIFIT breach and the CITY may terminate this Service Agreement.
ARTICLE 15
DEFAULTS BY CITY; REMEDIES
15.1 Events of Default; Remedies. If the CITY neglects or fails to perform or observe any of
its obligations under the terms, covenants, or conditions contained in this Service Agreement
within thirty (30) days after written notice of default or, when more than thirty (30) days shall be
required because of the nature of the default, if the CITY fails to cure such default after written
notice thereof, then the CITY shall be liable to MEDIFIT for any and all damages sustained by
MEDIFIT as a result of the CITY's breach and MEDIFIT may terminate this Service Agreement.
ARTICLE 16
DAMAGE OR DESTRUCTION
17.1 CITY Duty to Repair Casualty. Except as provided in this article and subject to the terms
and conditions of MEDIFIT maintenance obligations provided elsewhere in this Service
Agreement, should the Premises be damaged by fire, earthquake, or any other identifiable event
of a sudden, unexpected, or unusual nature (Casualty), the CITY, at the CITY's sole discretion
may repair any damages to the Premises, and may repair, restore and replace any such damaged
or destroyed Fixtures, Improvements or Personal Property. In the event the City decides not to
repair any damage, and such damage renders the Premises inoperable, the City may terminate
this agreement as provided in Article 11 (Termination).
17.2 No Abatement. In the event of reconstruction, replacement or repair, MEDIFIT shall
continue its operations on the Premises during any such period to the extent reasonably
practicable from the standpoint of prudent business management, and in continuing compliance
with applicable laws and regulations. MEDIFIT shall not be entitled to any compensation or
damages from the CITY for loss of use of the whole or any part of the Premises, MEDIFIT's
Personal Property, or any inconvenience or annoyance occasioned by such damage,
reconstruction or replacement.
13
Service Agreement
Between City and MediFit
9-4-15
17.3 Major Destruction. Notwithstanding any of the foregoing provisions of this Article to the
contrary, if, at any time after the Commencement Date, (i) the Improvements are damaged or
destroyed to the extent of more than twenty-five percent (25%) of their replacement cost, or (ii)
the damage is such that the Improvements cannot be repaired and restored within one hundred
and eighty (180) days after the Casualty, then MEDIFIT shall have the right to terminate this
Service Agreement upon thirty (30) days' prior written notice to CITY.
ARTICLE 18
EMINENT DOMAIN
18.1 Condemnation. If all of the Premises is taken under eminent domain proceedings by a
party other than CITY, or, if less than all of the Premises is taken under such proceeding and the
part taken substantially impairs the ability of MEDIFIT to use the remainder of the Premises for
the purposes permitted by this Service Agreement, then MEDIFIT may terminate this Service
Agreement as of the date that the condemning authority takes possession by delivery of written
notice of such election within twenty (20) days after MEDIFIT has been notified of the taking or,
in the absence thereof, within twenty (20) days after the condemning authority shall have taken
possession.
18.2 Continuation of Service Agreement After Condemnation. If this Service Agreement is
not terminated by MEDIFIT, it shall remain in full force and effect as to any portion of the
Premises remaining, and this Service Agreement will end as of the date possession of the part
taken by the public entity as to the part of the Premises that is taken.
18.3 Award. All monies awarded in any condemnation shall belong to the CITY. The CITY
shall have no liability to MEDIFIT for any award not provided by the condemning authority.
ARTICLE 19
SALE OR MORTGAGE BY CITY
19.1 Sale or Mortgage. Subject to MEDIFIT rights under this Service Agreement, CITY
may, pursuant to existing and subsequently enacted CITY ordinances and State laws, at any time
and without the consent of MEDIFIT, sell, purchase, exchange, transfer, assign, lease, encumber
or convey CITY interest in whole or in part, in the Park (collectively referred to in this Article as
a "Sale"). CITY shall provide to MEDIFIT written notice of CITY intent to a Sale pursuant to
this Article at least ninety (90) days prior to said proposed transfer.
19.2 Release on Sale. From and after a Sale of the CITY's entire interest in the Premises,
upon payment of all amounts due or owing to MediFit, the CITY shall be released from all
liability to MEDIFIT and MEDIFIT successors and assigns arising from this Agreement because
of any act, occurrence or omission of the CITY occurring after such Sale.
ARTICLE 20
SUBORDINATION; ATTORNMENT
14
Service Agreement
Between City and MediFit
9-4-15
20.1 Subordination. Without the necessity of any other document being executed and
delivered by MEDIFIT, this Service Agreement is and shall be junior, subject and subordinate to
any existing or future permits or approvals issued by the United States of America or any local,
State or federal agency affecting the control or operation of the Premises; MEDIFIT shall be
bound by the terms and provisions of such permits or approvals. In addition, this Service
Agreement is and shall also be subject, subordinate and junior to all mortgages, deeds of trust,
and other security instruments of any kind covering the Premises, or any portion thereof, as of
the Commencement Date of this Service Agreement.
ARTICLE 21
CITY'S RIGHT OF ACCESS
21.1 Right of Entry. The CITY, its agents, employees, and contractors may enter the Premises
at any time in response to an emergency, and, at reasonable hours to (a) inspect the Premises and
Improvements; (b) determine whether MEDIFIT is complying with its obligations in this Service
Agreement (including its obligations with respect to compliance with Hazardous Materials
Laws); (c) post notices of nonresponsibility or similar notices; (d) inspect the progress of
construction of any improvement; or (e) make repairs that this Service Agreement requires or
allows the CITY to make, or make repairs to any adjoining space or utility services, or make
repairs, alterations, or improvements to any other portion of the Premises; provided, however,
that all work will be done as promptly as reasonably possible and so as to cause as little
interference to MEDIFIT as reasonably possible.
ARTICLE 22
NOTICES
22.1 Notices. Whenever in this Service Agreement it shall be required or permitted that notice
or demand be given or served by either party to this Service Agreement to or on the other, such
notice or demand shall be in writing, mailed or personally delivered to the other party at the
addresses specified below. Mailed notices shall be sent by United States Postal Service, postage
prepaid and shall be deemed to have been given, delivered and received three (3) business days
after the date such notice or other communication is posted by the United States Postal Service.
All other such notices or other communications shall be deemed given, delivered and received
upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at
any time designate a different address to which notices shall be sent.
CITY: City of National City
Attention: Leslie Deese, City Manager
City of National City
1243 National City Boulevard
National City, CA 91950-4301
MEDIFIT: MEDIFIT Community Services LLC
Attention: Dan Burns, Chief Executive Officer and
V. Carl Walker, General Council
25 Hanover Road
15
Service Agreement
Between City and MediFit
9-4-15
Building A, Suite 104
Florham Park, New Jersey 07932
ARTICLE 23
NONDISCRIMINATION
23.1 Nondiscrimination. MEDIFIT hereby covenants by and for itself, its successors, assigns
and all persons claiming under or through it, that this Service Agreement is made and accepted
upon and subject to the condition that there shall be no discrimination against, or segregation of,
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the use, operation, or enjoyment of the Premises.
ARTICLE 24
RECORDS, ACCOUNTS AND AUDITS
24.1 MEDIFIT Duty to Keep Records. MEDIFIT shall, at all times during the Term, and for a
period of five (5) years following expiration or earlier termination of this Service Agreement,
keep or cause to be kept, true and complete books, records and accounts of all financial
transactions in the operation of all business activities, of whatever nature, conducted pursuant to
the rights granted by this Agreement. The books, records and accounts must be supported by
source documents such as sales slips, cash register tapes, purchase invoices or other pertinent
documents.
24.2 CITY's Right to Audit. The CITY shall have the right at any reasonable times, upon
reasonable notice, to examine and perform audits of MEDIFIT's records pertaining to its
operations on the Premises. The cost of said audits shall be borne by the CITY; however,
MEDIFIT shall provide to the CITY at MEDIFIT's expense, necessary data to enable CITY to
fully comply with each and every requirement of the State of California or by the United States
of America for information or reports relating to this Service Agreement and to MEDIFIT's use
of the Premises.
ARTICLE 25
GENERAL PROVISIONS
25.1 Authority. MEDIFIT represents and warrants that it has full power and authority to
execute and fully perform its obligations under this Service Agreement pursuant to its governing
instruments, without the need for any further action, and that the person executing this Service
Agreement on behalf of MEDIFIT is the duly designated agent of MEDIFIT and is authorized to
do so.
25.2 Captions. The captions and headings appearing in this Service Agreement are inserted
for convenience only and in no way define, limit, construe, or describe the scope or intent of the
provisions of this Service Agreement.
16
Service Agreement
Between City and MediFit
9-4-15
25.3 CITY Approval. Except where stated herein to the contrary, the phrases "CITY
approval," and "CITY written approval" or such similar phrases shall mean approval of the City
Manager of National City or said person's representative as authorized by said person in writing.
25.4 Compliance with Laws. MEDIFIT, shall procure, maintain and hold available for the
CITY's inspection, any governmental license or permit required for the proper and lawful
conduct of MEDIFIT operation of the Premises. MediFit shall invoice the CITY for expenses
related to any governmental license or permit required for the proper and lawful conduct of
MEDIFIT operation of the Premises. Except, the expense of the environmental health permit to
operate a pool issued by the County of San Diego, Department of Environmental Health shall be
paid by the CITY to the County of San Diego. MEDIFIT shall not use the Premises for any use
or purpose in violation of the laws of the United States of America, or the laws, ordinances,
regulations, orders or requirements of the State of California, the County of San Diego, the
CITY, or of other lawful authorities. MEDIFIT shall, at its expense, comply promptly with all
applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of
record, and requirements in effect during the Term (Laws or Orders), regulating the use by
MEDIFIT of the Premises.
25.5 Cumulative Remedies. In the event of a default under this Service Agreement, each
party's remedies shall be limited to those remedies set forth in this Service Agreement; any such
remedies are cumulative and not exclusive of any other remedies under this Service Agreement
to which the non -defaulting party may be entitled.
25.6 Entire Agreement. This Service Agreement, together with all addenda, exhibits and
riders attached hereto, constitutes the entire agreement between the parties with respect to the
subject matter hereof, and all prior or contemporaneous agreements, understandings and
representations, oral or written, are superseded.
25.7 Exhibits. All exhibits referred to herein are attached hereto and incorporated by
reference:
Exhibit A: Depiction of Las Palmas Pool
Exhibit B: Budget
25.8 Force Majeure. If either party is prevented or delayed from performing any act or
discharging any obligation hereunder, because of any and all causes beyond either party's
reasonable control, including unusual delays in deliveries, abnormally adverse weather
conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or
equipment, acts of God, governmental restrictions, regulations or controls, any hostile
government actions, civil commotion and fire or other casualty, legal actions attacking the
validity of this Service Agreement or the CITY or MEDIFIT operations of the Premises, or any
other casualties beyond the reasonable control of either party ("Force Majeure"), performance of
such act shall be excused for the period of such delay, and the period for performance of such act
shall be extended for a period equivalent to the period of such delay. Force Majeure shall not
include any bankruptcy, insolvency, or other financial inability on the part of either party hereto.
17
Service Agreement
Between City and MediFit
9-4-15
25.9 Governing Law. This Service Agreement shall be governed, construed and enforced in
accordance with the laws of the State of California.
25.10 Independent Contractor. MEDIFIT acknowledges that it is an independent contractor;
that it alone retains control of the manner of conducting its activities in furtherance of this
Service Agreement; and that it, as well as any persons, contractors or agents it may employ, are
not employees of CITY for any purpose.
25.11 Interpretation. The provisions of this Service Agreement shall be liberally construed to
effectuate its purpose. The language of all parts of this Service Agreement shall be construed
simply according to its plain meaning and shall not be construed for or against either party.
25.13 Modification. The provisions of this Service Agreement may not be modified, except by
a written amendment signed by both parties.
25.14 Partial Invalidity. If any provision of this Service Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Service Agreement
shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent
permitted by law.
25.15 Successors & Assigns. This Service Agreement shall be binding on and inure to the
benefit of the parties and their successors and assigns, except as may otherwise be provided
herein. MEDIFIT shall not assign this Service Agreement to any other party unless approved in
writing by CITY.
25.16 Time of Essence. Time is of the essence of each and every provision of this Service
Agreement.
25.17 Waiver. No provision of this Service Agreement or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is claimed.
IN WITNESS WHEREOF, the CITY and MEDIFIT have duly executed this Service Agreement
as of the day and year first above written.
18
Service Agreement
Between City and MediFit
9-4-15
CITY OF NATIONAL CITY
(CITY)
By:
Ron Morrison, Mayor
APPROVED AS TO FORM:
Claudia Gacitua Silva
City Attorney
19
MEDIFIT COMMUNITY SERVICES LLC
(MEDIFIT)
(Corporation — signatures of two corporate
officers required.)
By:
(Name)
(Print)
(Title)
,—
64,f /l& ttem,
By: ccr37&48rc2 4D3.
(Name)
Kurt Atherton
(Print)
President
(Title)
Service Agreement
Between City and MediFit
9-4-15
0
EXHIBIT B
BUDGET
FY16 FY17
Totals Totals
GRAND
TOTAL
Expenses
Payroll and Staffing Expenses
Salary -Managers $ 33,000 $ 66,000 $ 99,000
Wages -Guards for Recreational Swim & Lessons* $ 37,850 $ 76,330 $ 114,180
Wages -Administrative staff for recreational swim/public access $ 8,116 $ 8,724 $ 16,840
Wages -Learn to Swim Classes/Lessons* $ 8,417 $ 16,834 $ 25,250
Wages-Courses/Certification/Clinics $ - $ - $
Wages -Guards for Sweetwater Unified High School District programs $ 14,714 $ 35,448 $ 50,162
Wages -Guards for Southwestern College programs $ 14,714 $ 35,448 $ 50,162
Wages -Aquatic Group Exercise Classes $ 4,890 $ 13,008 $ 17,898
Payroll Burden-26% of payroll $ 31,642 $ 61,699 $ 93,341
Sub -Total $ 153,343 $ 313,491 $ 466,834
Marketing and Administrative Costs
Advertising & Marketing -Other $ 3,000 $ 6,000
Dues & Membership $ $ 200
Meeting Expense (mandatory monthly staff meetings) $ 1,225 $ 2,450
Uniforms $ 500 $ 500
Locker Room Supplies $ 3,000 $ 6,000
Office Supplies & Expenses $ 900 $ 1,800
Travel -Mileage Reimbursement/Parking/Tolls $ 350 $ 350
Program Supplies & Expenses $ 1,500 $ 2,400
Sub -Total $ 10,475 $ 19,700
Base Management Fee $ 35,000 $ 60,000
$ 9,000
$ 200
$ 3,675
$ 1,000
$ 9,000
$ 2,700
$ 700
$ 3,900
$ 30,175
$ 95,000
Total Expenses $ 198,818 $ 393,191
Revenue
Recreational Swim
Learn to Swim Classes/Lessons
Courses/Certification/Clinics
$ 592,009
Total Revenue
21
$ - $
$
Service Agreement
Between City and MediFit
9-4-15
RESOLUTION NO. 2015 —
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE A 20-MONTH SERVICE AGREEMENT
BETWEEN THE CITY OF NATIONAL CITY AND MEDIFIT COMMUNITY SERVICES, LLC,
TO PROVIDE AQUATIC SERVICES AT LAS PALMAS POOL IN AN AMOUNT NOT TO
EXCEED $650,000; ESTABLISHING A GENERAL FUND COMMUNITY SERVICES
CONTRACT SERVICES APPROPRIATION OF $200,000 FOR MEDIFIT MANAGEMENT
FEES AND OPERATING COSTS; INCREASING THE GENERAL FUND COMMUNITY
SERVICES BUILDING SERVICES INTERNAL CHARGES APPROPRIATION BY UP TO
$144,300 TO ACCOUNT FOR GAS, ELECTRIC, WATER, AND CHEMICAL COSTS;
AND THE ESTABLISHING A GENERAL FUND REVENUE BUDGET
TO ACCOUNT FOR USER FEES IN THE AMOUNT OF $112,500
WHEREAS, the City of National City owns the real property commonly known as
Las Palmas Pool, located at 1800 East 22nd Street, National City (the "Premises"); and
WHEREAS, MediFit is a privately -held fitness and wellness management and
consulting company and is in the business of designing, managing, and operating all aspects of
mixed use health, fitness and aquatics centers similar to Las Palmas Pool; and
WHEREAS, the City desires to enter into an Agreement with MediFit for the
operation the Las Palmas Pool with MediFit programs serving the local community; and
WHEREAS, pursuant to the Agreement the City will be responsible for repair and
maintenance of the Premises, which includes improvements, landscaping, janitorial, facility
maintenance, chemical maintenance, and information technology; and
WHEREAS, MediFit will be responsible for the operation of the Premises, which
includes, personnel, programming, events, and operating procedures and policies; and
WHEREAS, an appropriation of $200,000 is necessary for this fiscal year to
cover MediFit's management fee and operating costs. The appropriation will be covered by a
General Fund fund balance where additional revenues would offset the cost to operate the pool;
and
WHEREAS, an increase to the Community Services Building Service internal
charges line item for up to $144,300 is required for the cost of utilities and chemicals associated
with the operation of Las Palmas Pool, and an equal decrease to the General Fund and Library
Fund Building Services internal charges line items, making it a net zero increase to the General
Fund.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the Mayor to execute a 20-month Service Agreement, with
MediFit Community Services, LLC, to provide aquatic services at Las Palmas Pool.
BE IT FURTHER RESOLVED that the City Council authorizes the establishment of
a General Fund Community Services Contract Services appropriation of $200,000.
BE IT FURTHER RESOLVED that the City Council authorizes an increase to the
General Fund Community Services Building Services internal charges appropriation by up to
$144,300.
Resolution No. 2015 —
Page Two
BE IT FURTHER RESOLVED that the City Council authorizes the establishment of
a General Fund revenue budget to account for user fees of $112,500.
PASSED and ADOPTED this 3rd day of November, 2015.
Ron Morrison, Mayor
ATTEST:
Michael R. Dalla, City Clerk
APPROVED AS TO FORM:
Claudia Gacitua Silva
City Attorney
0
w�
(nwz
Qwo
ce
0a
a_ fz
Ewa
<uo
J iCY O-
W 0..
l/1 Q
FINANCIAL SUMMARY FOR FYi6
• • ro • riation Needed
$ 2001000
ilities & Chemicals (net zero increase)
!mated Elec is
timated Gas
mated
• $ 200, 000
appropriation offset
by $112,500 in
revenue
• Net increased cost
to the City for FY16
is $87,500
FINANCIAL SUMMARY FOR FYI7
Revenue
s (gas, electric.
emicals
diFit
185,0 .e
65,000
6. 000-
$ 644,000
• If the cost of utilities and
chemicals rolled over
each year the FY17
budget would increase
by $394,000, which is
offset by $ 225, 00o in
revenue
• Net increased cost to
the City for FY17 is
$169,000
CAPITAL INVESTMENT
• Capital Equipment: $6o,000
• Bulkhead
• Lane lines
• Rubber decking
• Lifeguard chairs
• Recreation Equipment: $20,000
• Safety supplies
• Lifeguard supplies
• Recreational equipment for lap and open swim, swim lessons and group
exercise
AGREEMENT SUMMARY
• Term, Option to Extend and Transition Period
• 20 month term terminating on June 30, 2017.
• Parties may mutually agree to extend the term of the agreement for up to two
additional one year terms. Extension to the term must be discussed no Tess than
nine months prior to the end of the term and agreement must be reached no
Tess than six months prior to the end of the term.
• Should the City or MediFit decide not to extend the agreement within the
timeframe above, MediFit will work with the City to transition the operations to
the City over the six month period preceding the end of the term.
• Not to Exceed Amount
• MediFit agrees that the management fee and operating costs, shall not exceed
a total of $650,000 over the term of the agreement.
AGREEMENT SUMMARY CONT.
• Third Party Rental Groups
• The City will separately collect rental revenue from third party rental groups.
MediFit shall allow all City approved third party rental groups to use the
premises and shall give priority use to City requests for either third party rental
groups or City use for events.
• Marketing
• MediFit will work closely with the City and the Community Services Department
in designing and implementing effective and low cost program marketing
campaigns, including community outreach to find programming opportunities.
MediFit will develop and launch outdoor fitness and program initiatives.
• City Residents
• Participants seeking day use of the premises who prove they are residents will
not be required to become members of MediFit and shall be offered reduced
resident rates.
AGREEMENT SUMMARY CONT.
• Programs
• Open Swim on Saturday and Sunday throughout the year and open swim seven
days a week during the months of June, July and August; as well as during the
National School District two week fall break that occurs during September
and/or October. In addition, consideration based on need will be given for an
expanded open swim schedule during the National School District two week
winter and spring breaks.
• Learn to swim classes throughout the year based on community needs. The
number of classes offered will increase during the months of June, July and
August. A variety of learn to swim classes for youth and adults with varying
levels of experience will be offered.
• Exercise classes for various ages and abilities offered based on community
needs.
AGREEMENT SUMMARY CONT.
• Utility Services
• The City shall be responsible for maintaining, providing and paying for utility
services, including but not limited to gas, water, electricity, trash, sewer charges
and telephone.
• Repair and Maintenance
• The City shall, at its own cost and expense, repair and maintain the premises.
The City is responsible for all repair and maintenance including landscape,
janitorial, and facility maintenance.
• Needs Assessment
• MediFit will assist the City with a needs assessment for the premises, which
includes, but is not limited to, providing analysis and recommendations to
improve operations and collecting input from the community through survey's
and community meetings.
STAFF RECOMMENDATION
Adopt the resolution authorizing,l) the Mayor to
execute a 20 month Service Agreement, with MediFit
Community Services LLC to provide aquatic services at
Las Palmas Pool; 2) establish a General Fund Community
Services Contract Services appropriation of $200,000; 3)
increase the General Fund Community Services Building
Services internal charges appropriation by up to
$144,3o0; 4) establish a General Fund revenue budget to
account for user fees of $112,500.
(f)
l/1
oo w
(i) z 2
Lil Q 2
D 0
0 u
CITY OF NATIONAL CITY
Office of the City Clerk
1243 National City Blvd., National City, California 91950
619-336-4228 phone / 619-336-4229 fax
Michael R. Dalla, CMC - City Clerk
November 10, 2015
Mr. Dan Burns
Mr. V. Carl Walker
MediFit Community Services LLC
25 Hanover Road
Building A, Suite 104
Florham Park, NJ 07932
Dear Mr. Burns and Mr. Walker,
On November 3ra, 2015, Resolution No. 2015-165 was passed and adopted by the City
Council of the City of National City, authorizing execution of a Service Agreement with
MediFit Community Services LLC.
We are enclosing for your records a certified copy of the above Resolution and a fully
executed original Service Agreement.
Michael R. Dalla,'CMC
City Clerk
Enclosures
cc: Audrey Denham, Community Services Dept.