ROSWELL NEW MEXICO
AGENDA ITEM ABSTRACT
AGENDA ITEM ABSTRACT
Item No. 4.
Regular City Council Meeting
- Meeting Date:
- 11/14/2024
COMMITTEE:
Legal
CONTACT:
Hessel Yntema
CHAIR:
Ed Heldenbrand
ACTION REQUESTED:
Approval to grant City Manager and City Attorney ability to renegotiate and amend Air Center leases to allow tenants to purchase their own insurance. (Heldenbrand/Yntema)
BACKGROUND:
Initiated by: Hess Yntema
For years, the City has been acquiring insurance on behalf of tenants and then seeking reimbursement after the purchase is made. This is inconsistent with common airport practice, has been difficult to administer, lead to airport losses, and higher insurance costs for some tenants. Management would like to include language that will be substantially similar to the following:
Tenant will provide fire and extended coverage to the Premises during the term of the Lease that is substantially similar to the insurance normally provided by the New Mexico Self Insured Fund for this building and as consistent with the City’s and ROW’s Insurance Requirements, as determined by the City.
Proof of such insurance shall be provided no later than June 15 of each year and at any other time upon request of City officials. If suitable proof of insurance is not provided within 15 days of June 15 or 15 days of the request, the Tenant agrees to reimburse the Landlord acquired insurance for insurance premium as determined and billed by Landlord at 115% of the cost. Such fire and extended coverage will not cover the property of Tenant or any property on the premises that does not belong to Landlord. Any lapse in insurance shall be considered an immediate breach.
For years, the City has been acquiring insurance on behalf of tenants and then seeking reimbursement after the purchase is made. This is inconsistent with common airport practice, has been difficult to administer, lead to airport losses, and higher insurance costs for some tenants. Management would like to include language that will be substantially similar to the following:
Tenant will provide fire and extended coverage to the Premises during the term of the Lease that is substantially similar to the insurance normally provided by the New Mexico Self Insured Fund for this building and as consistent with the City’s and ROW’s Insurance Requirements, as determined by the City.
Proof of such insurance shall be provided no later than June 15 of each year and at any other time upon request of City officials. If suitable proof of insurance is not provided within 15 days of June 15 or 15 days of the request, the Tenant agrees to reimburse the Landlord acquired insurance for insurance premium as determined and billed by Landlord at 115% of the cost. Such fire and extended coverage will not cover the property of Tenant or any property on the premises that does not belong to Landlord. Any lapse in insurance shall be considered an immediate breach.
FINANCIAL CONSIDERATION
Revenue neutral or a possible net savings are possible.
LEGAL REVIEW:
Legally sufficient.
BOARD AND COMMITTEE ACTION:
Legal Committee referred to City Council to consent agenda, vote 4-0, at their meeting on October 24, 2024.
STAFF RECOMMENDATION:
Consider recommending approval to grant City Manager and City Attorney ability to renegotiate and amend Air Center leases to allow tenants to purchase their own insurance.