AGENDA #9

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Chapel Hill Museum Request for Maintenance Assistance

DATE:             June 26, 2000

The purpose of this report is to present options for the Council’s consideration in response to a request for maintenance assistance received from the Chapel Hill Museum on March 27, 2000.  

The attached Resolution A would:

·        authorize the Manager to make emergency roof repairs when needed at the Museum, and to provide periodic roof inspection and minor roof repair;

·        authorize the Manager to replace the air conditioning system serving the first floor of the Museum;

·        authorize amendment of the Museum lease to require that the Museum make a payment equal to the amortized annual value of the air conditioning system replacement for each year that it continues to occupy the Museum building; and,

·        authorize an engineering assessment of the Museum building as a part of a Town-wide capital asset maintenance study, with a report of findings and options for the Council’s consideration in the fall of 2000.

Resolution B is the same as Resolution A, except that the Museum would not be required to reimburse any costs associated with replacement of the air conditioning system.

Resolution C would decline to provide financial assistance to the Museum and request that the Museum comply with the terms of its lease with the Town.

We recommend adoption of Resolution A, and believe that the Council reasonably could choose to adopt either Resolution B or Resolution C as a matter of public policy.

BACKGROUND

On January 24, 2000, the Chapel Hill Museum petitioned the Town Council to provide additional support to the Museum (Attachment A), including:   

On March 27, we recommended that the Council maintain the current conditions of its lease with the Museum (Attachment B) and provide no maintenance or capital support for the 523 East Franklin Street facility.  There were two main reasons for our recommendation: 

That evening, Museum Board Members Alan Rimer and Nancy Preston withdrew the Museum’s request for $20,000 annually in operations support.  However, they indicated continued interest in receiving Town support for routine facilities maintenance and capital maintenance.  They requested an opportunity to further discuss the issue of facilities maintenance and capital maintenance with the Manager, looking toward the possibility of financial support from the Town. 

The Council directed the Manager to meet with Museum officials and report back in time for consideration of items during the 2000-2001 budget development process. 

DISCUSSION

We have met with Museum representatives to discuss their request for additional funding.  In the course of our discussions, the Museum determined that it would be able to continue to pay for programming, regular operations, routine interior maintenance, and routine landscape maintenance in accordance with lease requirements.   

Therefore, this report focuses on the remaining issues:  

1.  Roof maintenance.    The Museum requests that the Town provide emergency roof repair, periodic roof inspection and minor roof maintenance.  We estimate that such services would cost about $1,500 annually if provided by Town staff.

Key advantages of such an arrangement would include:

·        emergency repairs would be provided on a more timely basis than can be provided by the Museum, reducing damage to the structure and interior finishes;

·        the useful life of the roof would be extended by periodic inspections and provision of minor maintenance and repairs; and,

·        the Town’s investment in the building would be better protected.

Key disadvantages to such an arrangement would include:

·        the Town would incur about $1,500 in costs annually and these costs would reduce support available for other Town services; and,

·        the Museum would be relieved of its financial obligation for this aspect of its lease with the Town.

Recommendation:  We believe that it would be reasonable for Town staff to provide emergency roof repair, periodic roof inspection and associated minor maintenance and repair.  Such an arrangement likely would result in quicker response to emergency needs for roof repair than could be provided by the Museum, thus providing better protection of the building, finishings and contents.  The costs of such service are minimal and can be provided through the Public Works Department.

2.      Immediate Repair or Replacement of Air Conditioning System Serving Upper Floor. The existing 25-ton air conditioning system that cools the upper floor of the Museum was installed in 1967.  It no longer works and is beyond economic repair.  Based on quotes obtained by the Public Works Department, we believe the cost of replacing the system would be about $17,000-20,000.  The work could be done in about 30 days.

The Museum states that it cannot pay the $17,000-20,000 cost of replacing the air conditioning system and continue programming and regular operations.  Absence of air conditioning on the upper floor is creating operating difficulties and unpleasant conditions for staff and visitors.  We believe it would be in the Town’s best interest, as well as the Museum’s, to replace the air conditioning system.

Key advantages of replacing the air conditioning system would include:

·        the building would be protected from excessive heat and moisture build-up that could cause damage to finishes and systems, as well as contents;

·        visitors to and staff of the Museum would be provided a pleasant environment;

·        the Museum’s probability of successful operations would be enhanced.

Key disadvantages of replacing the air conditioning system would include:

·        the Town would incur costs that would reduce funding available for other capital maintenance needs;

·        the Town would incur costs that were intended to be paid by the Museum under the terms of the Museum’s lease with the Town.

Recommendation.   We believe it would be reasonable for the Council to authorize the Manager to replace the air conditioning system in order to protect the building from deterioration and to provide a reasonable operating environment for the Museum.

The Council could either forgive this cost to the Museum or seek reimbursement of the full or amortized cost.  We believe it would be reasonable to do either, as a matter of public policy, and in view of the lease agreement, which the Museum executed.

We recommend that the Council authorize an amendment of the Museum lease to require that the museum make an annual payment equal to the amortized annual value of the air conditioning system replacement, for each year that it continues to occupy the Museum building.  We estimated the annual payment required of the Museum would be about $1,700.

3.      Long-term Capital Needs.  The Museum has requested that the Town assume responsibility for all capital maintenance of the building that it occupies.  The Museum lease specifies that the Museum will pay such costs, but the Museum states that it does not now have the resources to do so.

The proposed Capital Improvement Program for next fiscal year will be considered by the Council this evening in a separate agenda item.  Included in that proposal is an allocation that would allow us to conduct a Town-wide capital asset maintenance study.  We believe it would be useful for the Council to have the results of such a review of the Museum building before making decisions about long-term capital maintenance issues.

Recommendation:  We recommend that the Council authorize the Manager to conduct an engineering assessment of the Museum building as a part of a Town-wide capital asset maintenance study, with a report of findings and options for the Council’s consideration in the fall of 2000.

SUMMARY

The attached Resolution A would:

·        authorize the Manager to make emergency roof repairs when needed at the Museum, and to provide periodic roof inspection and minor roof repair;

·        authorize the Manager to replace the air conditioning system serving the first floor of the Museum;

·        authorize amendment of the Museum lease to require that the Museum make a payment equal to the amortized annual value of the air conditioning system replacement for each year that it continues to occupy the Museum building; and,

·        authorize an engineering assessment of the Museum building as a part of a Town-wide capital asset maintenance study, with a report of findings and options for the Council’s consideration in the fall of 2000.

If the Council adopts Resolution A, we will immediately initiate the authorized work and will prepare a budget amendment for the Council’s consideration at its July 5, 2000 meeting.

Resolution B is the same as Resolution A, except that the Museum would not be required to reimburse any costs associated with replacement of the air conditioning system.

Resolution C would decline to provide financial assistance to the Museum and request that the Museum comply with the terms of its lease with the Town.

We recommend adoption of Resolution A, and believe that the Council reasonably could choose to adopt either Resolution B or Resolution C as a matter of public policy.

Attachments:

            Resolution A (p.6)

            Resolution B (p. 7)

            Resolution C (p. 8)

            January 24, 2000 petition from Museum (p. 9)

            March 27, 2000 report to the Council, with attachments including lease agreement (p. 41)

            June 26, 2000 letter from Museum (p. 47)


RESOLUTION A

A RESOLUTION AUTHORIZING CERTAIN MAINTENANCE AND REPAIRS AT THE CHAPEL HILL MUSEUM BUILDING WITH COSTS AMMORTIZED BY THE MUSEUM (2000-06-26/R-12a)

WHEREAS, the Town Council has determined that it is in the best interests of the Town to authorize certain work to protect the Town’s capital investment in the building now known as the Chapel Hill Museum;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby authorizes:

·        the Manager to make emergency roof repairs when needed at the Museum, and to provide periodic roof inspection and minor roof repair;

·        the Manager to replace the air conditioning system serving the first floor of the Museum;

·        amendment of the Museum lease to require that the Museum make a payment equal to the amortized annual value of the air conditioning system replacement for each year that it continues to occupy the Museum building; and,

·        an engineering assessment of the Museum building as a part of a Town-wide capital asset maintenance study, with a report of findings and options for the Council’s consideration in the fall of 2000.

This the 26th day of June, 2000.


RESOLUTION B

A RESOLUTION AUTHORIZING CERTAIN MAINTENANCE AND REPAIRS AT THE CHAPEL HILL MUSEUM BUILDING WITH NO COSTS ASSESSED TO THE MUSEUM (2000-06-26/R-12b)

WHEREAS, the Town Council has determined that it is in the best interests of the Town to authorize certain work to protect the Town’s capital investment in the building now known as the Chapel Hill Museum;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby authorizes:

·        the Manager to make emergency roof repairs when needed at the Museum, and to provide periodic roof inspection and minor roof repair;

·        the Manager to replace the air conditioning system serving the first floor of the Museum, with no costs assessed to the Museum;

·        an engineering assessment of the Museum building as a part of a Town-wide capital asset maintenance study, with a report of findings and options for the Council’s consideration in the fall of 2000.

This the 26th day of June, 2000.


RESOLUTION C

A RESOLUTION DECLINING FINANCIAL ASSISTANCE TO THE CHAPEL HILL MUSEUM AND INSTRUCTING THE MANAGER TO ENFORCE THE TERMS OF THE MUSEUM BUILDING LEASE (2000-06-26/R-12c)

WHEREAS, the Chapel Hill Museum’s lease of the Town-owned building at 523 East Franklin Street requires the Museum to provide all maintenance and operations costs for the facility; and,

WHEREAS the Town Council has, as a matter of public policy, determined that the terms of the lease should be enforced;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council declines to provide financial assistance to the Chapel Hill Museum and instructs the Manager to enforce the terms of the Museum building lease.

This the 26th day of June, 2000.