To: HONORABLE MAYOR AND From: Jane Light

CITY COUNCIL

Subject: SEE BELOW Date: May 19, 2003

Council District: 3

SNI: N/A

SUBJECT: FIRST AMENDMENT TO THE AGREEMENT FOR OWNERSHIP AND OPERATION OF JOINT LIBRARY BUILDING AND GRANT OF EASEMENT (DATED DECEMBER 17, 1998)

RECOMMENDATION

It is recommended that the City Council adopt a resolution authorizing the City Manager to negotiate and execute:

(a) the First Amendment to the Agreement between the City and the Trustees of the California State University System on behalf of San Jose State University for the Operation and Maintenance of the new Dr. Martin Luther King, Jr. Library in order to update the allocation of space, to specify the method of collecting and disbursing funds for payment of maintenance expenses; and

(b) a Memorandum of Agreement on Technology for the new Library, to provide for reimbursement to the University in an amount not to exceed $997,200. for the acquisition of a joint Automated Library System, and to specify cost allocation formulas for the acquisition of telephone, data, and computer systems.

BACKGROUND

In December of 1998 the City Council approved an agreement for the joint ownership and operation with San Jose State University of a new library to function as both the City’s Main Library and the University Library (the “Operating Agreement”).

Some decisions about how the new library would operate had not been made at that early date. The agreement stated that when decisions about how telephone, computer, and video services would be provided in the new building, an amendment would be prepared to specify the responsibilities and obligations of each of the parties. The agreement also required that Exhibit A, which identified the designation and use of space between the parties, be updated prior to the opening of the building.

University and City representatives have met to review the Operating Agreement and determined other, minor changes that need to be included in this amendment.

ANALYSIS

This First Amendment includes the following minor changes:

· Exhibit A, which identifies how space is assigned and used between the parties, has been updated to reflect the final building plans.

· Maintenance and utilities payments and accounting: The City will pay the University an amount equal to the same per square foot rate that the University receives for maintenance and utilities from the California State University System (this rate may change from time to time) multiplied by the Total City Square Footage. In 1998, it appeared that this amount would be just for maintenance, not for utilities. As the University staff and City staff developed the building maintenance and utilities budget for FY03/04 budget, we learned that the new rate set by the University System includes utility costs. The City contribution for maintenance and utilities will be placed in a special account. The City has right to audit, review or inspect books and records relating to the cost of library maintenance and utilities for the current and prior two fiscal years.

The libraries have agreed to jointly own and manage telephone services, the telecommunications network, computer, video, and data services, and a specialized library automation system. The Memorandum of Agreement Regarding Process and Cost Allocation for Acquisition of Technology summarizes the agreements the two libraries have made regarding how these systems will be managed, including cost sharing for maintenance, upgrade, and replacement of the hardware and software included in these systems.

· The libraries jointly selected a specialized library automation system to perform the catalog, inventory control, circulation and related functions for the King Library and all of the City branch libraries. The University has entered into a purchase contract on behalf of both parties. The City will pay 66.67% of the total purchase price of the system and the University will pay 33.33%. The amount the City owes the University for the acquisition of this system is $997,200.

· This library automation system may be upgraded or replaced by mutual agreement of the City and University. Replacement, maintenance or upgrade of components of the system that serve only the King Library will be borne equally by both parties. Costs that serve both the King Library and the City branches will be paid 66.67% by the City and 33.33% by the University. The City will be responsible for the costs of any maintenance, repair or replacement of components that serve only the branch libraries.

· The data network equipment in the King Library has been acquired as part of the library project’s furniture, fixtures and equipment purchases and is owned jointly by the City and University. Annual maintenance costs of the network hardware and software for the King Library will be shared equally. Replacement or repair costs for the data network in the King Library will be paid 41% by the City and 59% by the University. Maintenance costs for network hardware and software that supports both the King library and the branch libraries will be paid 66.67% by the City and 33.33% by the University. The City will be responsible for all costs of purchase, maintenance, repair or upgrade of any components of the network that support only the branch libraries, are located in branch libraries, or are needed to connect the branches to the King Library.

· Computers and related equipment in the King Library for use by library customers, in instructional labs, and at service desks have also been acquired as part of the Library project’s furniture, fixtures and equipment purchases. Replacement and upgrade costs will be shared equally. Equipment will be upgraded or replaced by mutual agreement. The University intends to purchase and maintain some computers for the exclusive use of its students. The University and City will each provide computers for the use of its employees at their workstations or offices.

· Six self-checkout machines have been installed as part of the Library project’s furniture, fixtures and equipment purchases. The City will pay 2/3 and the University 1/3 of the annual maintenance and replacement costs of the machines.

· Library materials security equipment has been procured as part of the Library project’s furniture, fixtures and equipment purchases. The parties will share maintenance and replacement costs equally.

· The University and City have acquired a telephone switch and central telephone equipment including handsets as part of the Library project’s furniture, fixtures and equipment purchases to be located in the King Library. Telephone lines shared by the parties will be identified and the costs of use, service, maintenance, upgrade and replacement of the shared lines will be shared equally by the parties. Each party will identify telephone lines for its sole use and be responsible for all costs relating to those lines. If branch libraries use the telephone system installed in the King Library, the City will be responsible for all costs related to the use, maintenance, upgrading and replacement of the components that support the branches.

· The two libraries will develop a tracking system to record and allocate the relative usage rates of the various systems included in the MOA. This data will be used to document the allocation of costs under the terms of this agreement. The parties will negotiate in good faith regarding the cost allocations provisions if warranted.

PUBLIC OUTREACH

Extensive public outreach regarding the joint use library was conducted in 1997 and 1998. Since then, numerous customer surveys and focus groups have been conducted at both the City’s Main Library and the University Library to gather information for the operation of the new King Library.

COORDINATION

This report has been coordinated with the City Attorney’s Office.

COST IMPLICATIONS

The City’s share of the purchase of the specialized library automation system is $997,200. These funds were appropriated to the Library Department’s Capital Budget for FY 2002/2003.

Anticipated costs of the City’s share of maintenance for the specialized library automation system, the data network, the telephone system, the self-checkout machines and library materials security equipment are included in the proposed Library Department operating and capital budgets for FY 2003-2004.

BUDGET REFERENCE

Fund: General Fund-001

Amount: $455,000

Budget Document: 2002/2003 Adopted Capital Improvement Program Budget, Page 199.

Fund: Construction and Conveyance Tax Fund–393

Amount: $940,000

Budget Document: 2002/2003 Adopted Capital Improvement Program Budget, Page 199.

CEQA

Not a project.

Jane Light

Library Director, Library Department