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Cheech Center Update and State Grant Resolution • Page 3 DISCUSSION: The Main Library facility was built in 1964 and is 54 years old. Most functional systems are original to the facility and have reached the end of their life cycle. As a result of the facility assessment, the design consultants determined that most of the Main Library functional systems such as heating, ventilation, air conditioning, electrical, lighting, plumbing, elevator, building envelop and roofing need substantial repairs and/or complete replacements. Completing these renovations at the Main Library will give the City an opportunity to replace outdated and inefficient systems and deliver a refurbished, state-of-the-art facility to house the new Cheech Center. Design consultants have determined renovation of the Main Library building will cost approximately $10 million. Of this amount, approximately $2-3 million represents the expense to rehabilitate the roof, HVAC, and elevator systems. The expense of these improvements would have to be assumed by the City, were the Cheech Center project fail to come to fruition. The MOU between the City, RAM and Cheech describes the process to assist the parties in their fundraising efforts to convert the existing Main Library into the new Cheech Center. The initial fundraising goal for the 12 month MOU term (February 2018 plus a 3 -month optional extension through May 2018) was set at a minimum of $3 million. Since execution of the MOU by all parties, the City, RAM and Cheech Marin have all participated in fundraising efforts for the renovation project. As of the writing of this report, 90% or $2.7 million of the initial $3 million fundraising goal has been achieved. The parties are confident that the $3 million goal will be timely met. As is typical to fundraising efforts, the $2.7 million represents all of the written commitments made to date. It does not yet represent the total amount of funding currently on hand, given that an operating agreement between the City and RAM has not yet been approved and executed. The City Council is tentatively scheduled to consider the operating agreement on May 22, 2018. The City has been pursuing additional funding sources, including State grants, to renovate the existing Main Library building. Over the last few months, City staff have engaged the California Natural Resources Agency to secure $1 million in grant funding for the Cheech Center. Although this allocation was set aside specifically for the Cheech Center, the City must still submit an application for the funding and enter into a grant agreement with the Natural Resources Agency to formally access the funds. Staff can move forward with securing the funding after the City Council adopts the attached resolution authorizing the City Manager to submit the grant application and execute the grant documents. On May 22, 2018, City staff will return to the City Council with a project and funding update, and request approval of an amended Page and Turnbull agreement to provide future Phase 2 construction design services. Staff will also request approval of the final operating agreement between the City and RAM. The Acting Library Director and Chief Financial Officer concur with this report. FISCAL IMPACT: The total fiscal impact of this action is $1,000,000 in grant revenues. The grant revenues will be appropriated into account 9408800-334300 and will be used for design costs estimated at $250,000, and for partial renovation costs of the Main Library facility estimated at $750,000. All remaining revenue for the Cheech Center project will be obtained through RAM private funding, donations and grants.