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AMENDMENT NO. THREE TO CONTRACT K-1920-32: BY AND BETWEEN THE CITY OF NORMAN, OKLAHOMA, AND THE BOARD OF REGENTS OF THE UNIVERSITY OF OKLAHOMA EXTENDING THE TERM OF THE LEASE AGREEMENT FOR OFFICE SPACE, SERVICE BAYS, FLEET STORAGE, AND WAREHOUSE/GARAGE SPACE TO BE USED FOR PROVIDING TRANSPORTATION SERVICES UNTIL SEPTEMBER 30, 2021, OR UPON SUBSTANTIAL COMPLETION AND OCCUPATION OF THE NORTH BASE COMPLEX PROJECT, PHASE I, BY THE CITY OF NORMAN.
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BACKGROUND: The City of Norman assumed operation of the public transportation system in the Norman area on July 1, 2019. The City contracted with the University of Oklahoma to provide operational services through August 2, 2019. On August 5, 2019, the City’s third-party contractor, the Central Oklahoma Transportation and Parking Authority (COTPA), doing business as EMBARK, began operation of the City’s fixed routes. On July 30, 2019, the City approved Contract K-1920-32, leasing a portion of University-owned property located at 510 Chesapeake, commonly referred to as the OU Transportation Operations Center, for office space, maintenance bays, and fleet storage, until December 31, 2019. On December 10, 2019, the City and the University extended that lease agreement until June 30, 2020. Another amendment extended the lease agreement through December 31, 2020. This amendment, anticipated to be the third and final amendment, extends the lease through September 30, 2021 or upon substantial completion and occupation of the North Base Complex Project, Phase I, by the City of Norman.
DISCUSSION: The City recently approved Contract K-2021-35 with Flintco, L.L.C., for the construction of the North Base Complex Project, Phase I, which has a projected substantial completion date of July 30, 2021. The North Base Complex Project, Phase I, will be constructed adjacent to the City Service Facility in the vicinity of North Flood Avenue at Da Vinci Street (“North Base”), that will house the Park Maintenance Division staff and fleet; provide for public transportation (bus) fleet maintenance and staff services; and provide for public safety-related heavy equipment fleet services (fire trucks). This amendment extends the term of the current University-owned Facility Lease Agreement until September 30, 2021, or until the North Base Complex Project, Phase I, is substantially complete and occupied by the City. The adjusted termination date allows flexibility that would allow the City to make the University’s property available for its own use at an earlier date, while also avoiding the City’s payment of unnecessary rent.
Funds are available for ongoing lease-related expenses in the Public Transit Fund, Outside Auto Repair (Account Org 27550276, Object 44201) for Fleet Maintenance and Office Space Rental (Account Org 27550277, Object 44503) for Administration and Office Space.
RECOMMENDATION: Staff recommends approval of Amendment No. 3 to Contract K-1920-32. This is a critical component of ensuring that the Norman public transportation system continues to operate effectively while the City continues working on building its own maintenance and support facilities.