Council Regular Meeting

MINUTES CITY COUNCIL REGULAR MEETING CITY OF MONTEREY Tuesday, May 17, 2011 4:00 - 5:30 p.m. 7:00 - 11:00 p.m. COUNCIL CHAMBER, FEW MEMORIAL HALL OF RECORDS MONTEREY, CALIFORNIA Councilmembers Present: Councilmembers Downey, Haferman, Selfridge, Sollecito, Della Sala Absent: None City Staff City Manager, Assistant City Manager, Director of Information Present: Resources/City Clerk, City Attorney, Assistant Director Plans and Public Works, Chief of Planning, Engineering, and Environmental Compliance, Finance Director, Fire Chief, Community Services Director, Police Chief, Human Resources Director, Recreation & Community Services Director, Housing & Property Manager, City Engineer, Parks & Maintenance Superintendant, Senior Assistant City Clerk, CALL TO ORDER The City Manager noted that Council received on the dais suggested changes to Item 3, the May 3rd Minutes, that in reference to Item 14 the Council and Neighborhood Improvement Program Committee will conduct a study session on this topic in June, and that staff recommends tabling Item 19 based on a request by the applicant. PRESENTATIONS 1. Recognition of National Public Works Week (Plans & Public Works - 701-17) Action: Proclamation read CONSENT ITEMS Councilmember Downey requested Items 9, 12, and 14 be pulled to discuss questions she had on these items. On a motion by Councilmember Selfridge, seconded by Councilmember Sollecito, and carried by the following vote, the City Council approved the Consent agenda with the exceptions of items 9, 12, and 14 which were pulled for discussion and item 3 which was amended and approved as amended: AYES: 5 COUNCILMEMBERS: Downey, Haferman, Selfridge, Sollecito, Della Sala NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None Approval of Minutes 2. April 27, 2011 (Information Resources - 701-09) Action: Approved (5-0)  City Council Minutes Tuesday, May 17, 2011 3. May 3, 2011 (Information Resources - 701-09) Action: Amended and approved as amended (5-0) Ordinances 4. Second Reading - Ordinance Rezoning the Property at 454 Cedar Street from R-1-6 to R-1-6- H-2 (IR - 701-11) Action: Adopted Ordinance 3460 C.S. (5-0) Resolutions 5. Authorizing the City to Enter into a Lease Agreement with Keystone America, Inc., DBA The Paul Mortuary, a Subsidiary of Service Corporation International, for Operation of the City Crematorium (Plans & Public Works - 811-03) Action: Adopted Resolution 11-049 C.S. (5-0) 6. Receive Alvarado Street Maintenance District 85-1 Engineer's Report, Adopt Resolution of Intention to Levy Assessment, and Set Time for Public Hearing (Plans & Public Works - 407-08) Action: Adopted Resolution 11-050 C.S. (5-0) 7. Receive Calle Principal Street Maintenance District 00-1 Engineer's Report, Adopt a Resolution of Intention to Levy Assessment, and Set Time for Public Hearing (Plans & Public Works - 407- 08) Action: Adopted Resolution 11-051 C.S. (5-0) 8. Adopting the Annual Reports and Approving Resolutions to Set a Public Hearing Date to Levy the Annual Assessment a. Cannery Row Business Improvement District b. New Monterey Business Improvement District c. North Fremont Business Improvement District (Plans & Public Works - 407-08) Action: Adopted Resolutions 11-052, 11-053, and 11-054 C.S. (5-0) 9. Accepting the Annual Report a. Old Monterey Business Improvement District (Plans & Public Works - 407-08) Action: Pulled from Consent for discussion; Adopted Resolution 11-055 C.S. (5-0) Rick Johnson responded to a variety of questions posed by Councilmember Downey on this item. Mayor Della Sala opened public comment on this item, and seeing no requests to speak, closed public comment . On a motion by Councilmember Haferman, seconded by Councilmember Selfridge, and carried by the following vote, the City Council adopted Resolution 11-055 C.S., approving the Annual Report of the Old Monterey Business Improvement District: AYES: 5 COUNCILMEMBERS: Downey, Haferman, Selfridge, Sollecito, Della Sala NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None 2  City Council Minutes Tuesday, May 17, 2011 10. Authorizing a New Lease with Anne Greene for the 512 Square Foot (SF) Portion of the Vacant Ground Floor Space at 380 Alvarado (Plans and Public Works - 206-03 PW-HPM) (Plans & Public Works - 206-03) Action: Adopted Resolution 11-056 C.S. (5-0) 11. Authorizing a New Lease with Melissa Thoeny dba Olio Vintage Fun for the 983 Square Foot (SF) Portion of the Vacant Ground Floor Space at 380 Alvarado (Plans and Public Works - 206- 03 PW-HPM) (Plans & Public Works - 206-03) Action: Adopted Resolution 11-057 C.S. (5-0) 12. Approve 1330 Skyline Drive Final Map and Condominium Plan with Amended Conditions of Approval, Authorize Recording the Affordable Housing Agreement, and Authorize the City Manager to Sign the Memorandum of Understanding (Plans & Public Works - 203-02) Action: Pulled from Consent for Discussion; Adopted Resolution 11-058 C.S. (4-1; Haferman voting No) Housing Property Manager Marvin responded to a variety of questions posed by Councilmember Downey on this item. Mayor Della Sala opened public comment on this item. Sharon Dwight spoke against staff eliminating condition of approval 4b. Councilmember Haferman noted that it is staff's recommendation to Council to waive this condition not that staff has approved waiving of this condition. Chief of Planning, Engineering, and Environmental Compliance Rerig explained the rationale used to make this recommendation and that that there is no City mandate to require this condition. Seeing no further requests to speak, Mayor Della Sala closed public comment. On a motion by Councilmember Downey, seconded by Councilmember Sollecito, and carried by the following vote, the City Council adopted Resolution 11-058 C.S., approving Final Map and Condominium Plan and conditions of approval as recommended by staff for 1330 Skyline Drive: AYES: 4 COUNCILMEMBERS: Downey, Selfridge, Sollecito, Della Sala NOES: 1 COUNCILMEMBERS: Haferman ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None 13. Amend Contract Award for Purchase of Mobile Audio Video Recording System (MAVRS) for Police Patrol Vehicle Fleet (Police - 704-05) Action: Adopted Resolution 11-059 C.S. (5-0) Other 14. First Review of Recommended Neighborhood Improvement Program (NIP) Projects for FY2011/12 (Plans & Public Works - 406-03) Action: Pulled for discussion; Discussed and direction given Mayor Della Sala opened public comment on Item 14. NIP Spokespersons Sharon Dwight and Rick Heuer stated they would gladly answer Council questions on any item on the list. Seeing no further requests to speak, Mayor Della Sala closed public comment. Councilmember Downey thanked the Committee for its hard work, noting that financial uncertainty may impact which of these projects will move forward and when. 3  City Council Minutes Tuesday, May 17, 2011 Mayor Della Sala asked staff to report back on seven items on the NIP Project list and Councilmembers Downey Selfridge, and Sollecito asked questions or provided other feedback to staff. ***End of Consent Agenda*** PUBLIC COMMENTS Mayor Della Sala opened public comments on items not on the agenda and seeing no requests to speak closed public comments. PUBLIC HEARING 15. Consideration of Planning Commission Recommendation to Approve the FY 2011-2012 Action Plan for Community Block Grant Funds (CDBG) and Approve the FY 2011-2012 Redevelopment Agency Housing Set-Aside Budget (Plans & Public Works - 201-09) Action: Adopted Resolution 11-060 C.S. (4-1; Selfridge voting No) Housing and Property Manager Marvin presented the agenda report. Councilmembers Downey and Selfridge asked questions on redirecting funds to things like the State Theater. City Manager Meurer explained how the Council would articulate and implement a new acquisition plan for purchasing properties like this, noting that Council's action tonight implements Council's policy of a year ago. Mr. Marvin explained where the set aside funds slated for approval tonight would be used. Mayor Della Sala opened public comment on this item and on the related RDA item. Kellie Morgantini, Executive Director of Legal Services for Seniors, stated that agencies on this list provide services that cities cannot and asked Council to continue to support these agencies. Lynn Young, Executive Director of Josephine Kernes Pool, thanked the City for its support and asked Council to continue that support. Seeing no more requests to speak, Mayor Della Sala closed public comment on this item. On a motion by Councilmember Sollecito, seconded by Councilmember Haferman, and carried by the following vote, the City Council approved the FY 2011-2012 Action Plan for Community Block Grant Funds (CDBG) and the FY 2011-2012 Redevelopment Agency Housing Set-Aside Budget. AYES: 4 COUNCILMEMBERS: Downey, Haferman, Sollecito, Della Sala NOES: 1 COUNCILMEMBERS: Selfridge ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None 4  City Council Minutes Tuesday, May 17, 2011 Adjourn to Redevelopment Agency Meeting 16. Consideration of Planning Commission Recommendation to Approve the FY 2011/2012 Action Plan for Community Development Block Grant funds (CDBG) and Approve the FY 2011/2012 Redevelopment Agency Housing Set-Aside Budget (Plans & Public Works - 201-09) Action: Adopted RDA Resolution 854 (4-1; Selfridge voting No) On a motion by Agency Member Haferman, seconded by Agency Member Sollecito, and carried by the following vote, the Redevelopment Agency adopted RDA Resolution 854, approving the FY 2011/2012 Action Plan for Community Development Block Grant funds (CDBG) and the FY 2011/2012 Redevelopment Agency Housing Set-Aside Budget. AYES: 4 AGENCY MEMBERS: Downey, Haferman, Sollecito, Della Sala NOES: 1 AGENCY MEMBERS: Selfridge ABSENT: 0 AGENCY MEMBERS: None ABSTAIN: 0 AGENCY MEMBERS None RECUSED: 0 AGENCY MEMBERS: None Adjourn to City Council Meeting ***Adjourn to Closed Session*** By consensus and due to a lack of meeting time the Council continued the closed session agenda to the end of the evening open session and then recessed the meeting at 5:43 p.m. At 7:00 p.m. Mayor Della Sala reconvened the meeting in open session, where all Councilmembers were present. ANNOUNCEMENTS FROM CLOSED SESSION Mayor Della Sala noted for the public that the closed session item on the afternoon closed session agenda was continued to the end of the evening session. Mayor Della Sala noted that the Council tabled Item 19 based on a request by the applicant. CONTINUED PUBLIC COMMENTS Mayor Della Sala opened public comments. Bruce Zanetta provided clarification on his comments to Council at its May 3rd meeting and spoke against what he termed unfair competition between regular commercial restaurants and subsidized wharf restaurants. Mr. Zanetta questioned the characterization by the City Manager as the library being a 100% subsidy. Seeing no further requests to speak Mayor Della Sala closed public comment. PUBLIC APPEARANCE 17. Adopting Amendments to the Memoranda of Understanding with the General Employees of Monterey (GEM), Management Employees' Association (MEA), Monterey Fire Fighters' Association (MFFA), Monterey Police Association (MPA), Police Lieutenants' Management Association (PLMA), and amending compensation for the Deputy Police Chiefs, Executive Management and Regular Part-time Employees (Human Resources - 507-01) Action: Adopted Resolutions 11-061 through 11-068 C.S. (5-0) 5  City Council Minutes Tuesday, May 17, 2011 Human Resources Director McCarthy presented the staff report, stressing that all bargaining units reopened negotiations when they did not have to and that collectively they have agreed to significant concessions as listed in the agenda report. Mayor Della Sala opened public comments on this item. Nelson Vega stated the concessions given by bargaining units pales in comparison to what is happening in the private sector today and stated the public should not be asked later for a tax increase to support employee compensation. Seeing no more requests to speak, Mayor Della Sala closed public comment. On a motion by Councilmember Downey, seconded by Councilmember Sollecito, and carried by the following vote, the City Council Adopted Resolutions 11-061, 11-062, 11-063, 11-064, 11-065, 11-066, 11-067, and 11-068 C.S. approving the Adopting Amendments to the Memoranda of Understanding with the General Employees of Monterey (GEM), Management Employees' Association (MEA), Monterey Fire Fighters' Association (MFFA), Monterey Police Association (MPA), Police Lieutenants' Management Association (PLMA), and amending compensation for the Deputy Police Chiefs, Executive Management and Regular Part-time Employees. AYES: 5 COUNCILMEMBERS: Downey, Haferman, Selfridge, Sollecito, Della Sala NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None 18. Presentation of Proposed 2011-12 City Operating Budget (Finance - 406-03) Action: Report received City Manager Meurer introduced the item, stating staff is not expecting Council to make a decision tonight, but instead to receive a report from staff and for Council to provide guidance and direction to staff, with approval of the operating budget slated for June 7th. Mr. Meurer noted that some employees will lose jobs and others will see a reduction in hours and this, in conjunction with the concessions from the bargaining units, is the plan to adopt a balanced budget. Mr. Meurer stressed that people provide services and that means fewer employees means reduction in some City services. Mr. Meurer stressed that the "new normal" City organization will be based on a reduction in staff and the use of out-sourcing of City services and other ways of working more efficiently. Mr. Meurer described the financial assumptions in the proposed budget. Finance Director Rhoads presented the agenda report, stressing the proposed budget is balanced and described the methodical approach the City used to fix the $5 million dollar structural budget gap. Mr. Rhoads articulated the four budget forecast assumptions which are: no more State money grabs; redevelopment agencies are not eliminated; no increase in COLA for staff; and employee concessions are ongoing. Director Rhoads depicted for Council the position reductions, position eliminations, and service reductions by department. Councilmembers Downey, Selfridge, and Sollecito asked questions about tree crew eliminations and Director Rhoads and Assistant Deputy Public Works Director Uslar provided cost comparisons for City tree crews versus contract tree crews. Mr. Rhoads also indicated which departments may be recommending fee increases, noting those would come back to Council for approval at a later date. Mr. Rhoads closed by stressing the proposal results in a structurally balanced budget and if the assumptions hold this sets the stage for modest future surpluses. 6  City Council Minutes Tuesday, May 17, 2011 At 9:00 p.m. Mayor Della Sala called a recess and reconvened the meeting is 9:15 p.m. Mayor Della Sala opened public comment and Nelson Vega expressed his opinion that part of the problem was that the City increased compensation for police officers too high several years ago. Todd Harris, a City tree crew member, described responsibilities and tasks performed by tree crews that are not done by oncall tree contractors, stating these tasks will definitely be missed if tree crews are eliminated. Albert Weisfuss, a tree trimmer, asked the Council to find another way to resolve this problem and to not cut City staff positions, stressing that tree trimming crew can do all of the tasks that an outside tree trimming contractor can. Seeing no more request to speak, Mayor Della Sala closed public comment. Councilmember Downey provided several areas for further cuts based on Director Rhoads' presentation. Mayor Della Sala asked staff to have private sector versus public sector salary comparisons for June 7th meeting. Councilmember Selfridge asked if the proposed budget indicates how much consultant services the City will use and Mr. Rhoads indicated it is not identified in that manner, while Mr. Meurer stated 2% is the percentage of work performed by consultants. Mayor Della Sala closed discussion on this item by reminding the public that the Council is slated to vote on the proposed budget June 7th. 19. Receive Report and Provide Direction on Lease Proposal for Tideland Adjacent to 300 Cannery Row (Plans & Public Works - 206-03) Action: Tabled On a motion by Councilmember Downey, seconded by Councilmember Sollecito, and carried by the following vote, the City Council tabled to a later unspecified date Item 19 in reference to a TIdelands Lease Adjacent to 300 Cannery based on a request by the applicant: City Manager Meurer stated at the afternoon session that staff recommended tabling this item and the Council voted unanimously to table this item during the Council" afternoon session. AYES: 5 COUNCILMEMBERS: Downey, Haferman, Selfridge, Sollecito, Della Sala NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None 20. Receive Report and Provide Direction to Respond to Request to Sell 570 Munras Avenue (Uptown Monterey) to the Tenant GLC/Foothill Monterey, LLC (Plans & Public Works - 206-03) Action: Received report; directed staff to deny request to sell property (3-1-1; Haferman voting No, Della Sala recused due to conflict) At 9:40 p.m. Mayor Della Sala stated he has a personal conflict on this item and recused himself, turned the meeting over to Vice Mayor Haferman, and left the Council Chamber. Housing and Property Manager Marvin presented the agenda report. Mr. Marvin described the benefits for selling the property. Mr. Marvin stated staff recommendation is to decline the offer, noting the City has not identified a way to replace the $250,000 loss of annual revenues if the land were sold. Vice Mayor Haferman opened public comment on this item. Doug Wiele, Foothills Partners, Inc. asked the City Council to sit down and discuss the potential to sell the property, suggesting deed use restrictions included in the sale that would restrict the property just as the current lease does. Bruce Zanetta stated the requirement by the City to have a local market at this site is one of the greater non fiscal advantages to this property. Willard McCrone spoke against 7  City Council Minutes Tuesday, May 17, 2011 selling this property, stating the City should hold onto this property because it is an anchor in downtown and has a substantial rent. Uwe Groebecker asked for this to be sent to the Mayor's ad hoc committee for review. Dan Albert, Senior spoke against selling the property and asked the Council to establish a property resale policy for the City of Monterey. Seeing no further requests to speak, Vice Mayor Haferman closed public comments. City Manager Meurer stated that Mr. Wiele's offer is a good offer, but selling the property is not in the best interests of the City of Monterey, stressing the City does not have anything to fill this revenue stream if it were sold. On a motion by Councilmember Downey, seconded by Councilmember Sollecito, and carried by the following vote, the City Council directed staff to deny the Request to Sell 570 Munras Avenue (Uptown Monterey) to the Tenant GLC/Foothill Monterey, LLC . AYES: 3 COUNCILMEMBERS: Downey, Selfridge, Sollecito NOES: 1 COUNCILMEMBERS: Haferman ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 1 COUNCILMEMBERS: Della Sala OTHER BUSINESS 21. Discussion of City of Lankaran, Azerbaijan Visit (Council Member - ) Action: Discussed; Added Request to Agendize Sister City Relationship with Lankaran to next Council Meeting At 10:31 p.m. Mayor Della Sala returned to the Council Chamber and Vice Mayor Haferman returned the gavel and meeting back to the Mayor. Councilmember Selfridge stated a group from Lankaran, Azerbaijan will be visiting Monterey in the near future with an eye to becoming a sister city. Councilmember Selfridge stated there would be no fiscal or staff impact for this visit or for the potential sister city relationship. By consensus the Council agreed to put a request to agendize a sister city relationship on the the next Council meeting. COUNCIL COMMENTS Councilmember Downey noted the progress on the plastic bag coalition and that MST has received the Secretary of Army ridership award. In response to her question, Chief Rerig stated the proposed sign ordinance is a Planning work program item and will be coming back to Council for review and approval. Councilmember Downey provided an update on the desalination plant and thanked the Monterey County Board of Supervisors for its support. Councilmember Haferman sent kudos to Fire and Police personnel for their efforts at recent fires on Surf Way and Dormody Court. Councilmember Selfridge sent kudos to recent CERT graduates, noting a new class starts September 8th. Councilmember Selfridge asked the public to attend Art in the Adobes from September 30th through October 2nd. Mayor Della Sala noted he and some City staff will attend a hearing at the State Water Resources Control Board on ASBS and to talk to the Secretary of Environmental Protection Agency. Mayor Della Sala stated the City is recommending alternatives that hopefully will improve the situation and not results in local cities losing tens of millions a dollars a year. Mayor Della Sala provided an update on the desalination plant financing plan, stressing that there have been hurdles, but it is still moving forward in every sense of the word. Councilmember Downey noted that the Board of Supervisors set a cap on spending. 8  City Council Minutes Tuesday, May 17, 2011 22. Councilmember Request to Agendize a Discussion Regarding Purchasing The Bay View School Facility (Council Member - 303-03) Action: Agendized Councilmember Selfridge asked this to be agendized, stating what she wants Council to do is request the school board reexamine whether the City can somehow acquire control of the property in order to lease it to the Bay View Academy so that the property will not be vacant for the next year and to try this for one year. Councilmember Selfridge also asked a letter be sent to the school board asking to speak about this item. On a motion by Councilmember Selfridge, seconded by Councilmember Sollecito, and carried by the following vote, the City Council approved agendizing a Discussion Regarding Purchasing The Bay View School Facility: AYES: 5 COUNCILMEMBERS: Downey, Haferman, Selfridge, Sollecito, Della Sala NOES: 0 COUNCILMEMBERS: None ABSENT: 0 COUNCILMEMBERS: None ABSTAIN: 0 COUNCILMEMBERS: None RECUSED: 0 COUNCILMEMBERS: None CITY MANAGER REPORTS City Manager Meurer reminded Council of upcoming meetings on May 24th and May 25th. ADJOURNMENT TO CLOSED SESSION At 10:55 p.m. Mayor Della Sala adjourned the meeting to closed session. ANNOUCEMENTS FROM CLOSED SESSION At 11:35 p.m. the Mayor reconvened the meeting to open session. Senior Assistant City Clerk stated that on a roll call vote with Councilmembers Downey and Selfridge voting No, the Council approved the following closed session announcement in reference to the anticipated litigation conference with Legal Counsel pursuant to G.C. Section 54956.9(b) with 45 potential number of cases. “The City Council Special Study session held on March 23, 2011 to review Willard McCrone’s allegations that past City Councils dealt with the Waterfront leases in an improper or illegal manner was followed by a Closed Session to discuss whether to initiate any litigation based on Mr. McCrone’s legal theories to void or invalidate the leases based on the alleged impropriety of past City Council actions. After listening to the City Attorney; the City’s outside attorney, whose law firm has expertise in the leasing of public lands; the former City Attorney, who was involved with the 1991 leases; several attorneys representing leaseholders and various members of the public, the City Council has come to the conclusion that it will not pursue litigation as the facts and the applicable law do not support it. The foundation of Mr. McCrone’s argument is that the City owns the buildings on 9 City Council Minutes Tuesday, May 17, 2011 the Wharf and at other Waterfront locations. However, the City Council finds that the leases, that have been in place for over twenty years, clearly state that the buildings are the property and responsibility of the lease holders, as evidenced by the attached excerpt from the leases. The City does not have the right to possess those buildings as the City never exercised the ninety day lease provision to allow it to possess those buildings. Based on the facts that the City Council currently knows, ownership of those buildings was properly negotiated as a part of the lease extensions in the early nineties and was not a gift of public funds by the City Council, at that time. Further, the City Council finds that the City is adhering to City Charter requirements and is receiving fair-market rents based on the MAI appraisals of the properties from 2007-2009, as confirmed by the Monterey Superior Court, and the fact that the public interest has been served by the leases. The Council emphasizes that there will be occasions where the public interest is not necessarily served by maximizing rental return on the lease of the public property. For example, the leases for the Maritime Museum and the Monterey Bay Aquarium have an objective other than maximum lease revenue. At times, lease terms will need to be created to ensure the economic viability of desired city redevelopment on parcels involving city lands. While the City Council had already made policy decisions regarding new lease holds that were much different and much more revenue aggressive than past city leases. Mr. McCrone has re- energized that effort. Finally, the City Council heard no evidence nor have they seen any documents that lead them to the conclusion that any previous City Council member acted in an illegal, corrupt or unethical manner or in ultra vires of their authority. The City Council thanks Mr. McCrone for his efforts, even though the City Council does not arrive at the same conclusion as he presented at the City Council meeting or in his comments to the press and public.” The following are Wharf Lease excerpts regarding ownership as referenced in the preceding closed session announcement: “B. CONSTRUCTED IMPROVEMENTS. Lessee has previously constructed an approved structure or structures upon the premises consisting of building, deck, and piling improvements. Before any further work of construction, alteration, or repair is commenced on the premises, Lessee shall comply with all of the following conditions and provisions unless City’s written waiver is first obtained: C. OWNERSHIP OF IMPROVEMENTS. All improvements constructed on the premises by Lessee as permitted by this lease, including all buildings and parking lots or facilities, shall be owned by Lessee until expiration of the term, including the option if exercised, or earlier termination of this lease. All improvements on the premises ninety-one (91) days after the expiration or sooner termination of this lease shall, without compensation or demand, then become City’s property, free and clear of all claims, liens, and encumbrances to or against them by Lessee or any other person, and Lessee shall defend and indemnify City against all liability and loss arising from such claims, liens, and encumbrances or from City’s exercise of the rights conferred by this paragraph. Lessee shall execute, acknowledge and deliver to City, within ninety (90) days after surrender of the premises, a valid and recordable quitclaim deed covering all of the leasehold premises including all buildings, fixtures, equipment, and property remaining thereon.” 10 City Council Minutes Tuesday, May 17, 2011 ADJOURNMENT At 11:35 p.m. having no more business before the Monterey City Council, Mayor Della Sala adjourned the meeting. Respectfully Submitted, Approved, /s/ /s/ Catherine A. Raynor Chuck Della Sala Senior Assistant City Clerk Mayor 11