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HomeMy WebLinkAbout25L - ESTABLISH NON ENDOWED FUND CITY COUNCil MEETING DATE: REQUEST FOR COUNCIL ACTION CLERK OF COUNCil USE ONLY: August 18, 2008 TITLE: APPROVED {1J2Jt2 CITY MANAGER o As Recommended o As Amended o Ordinance on 1 sl Reading o Ordinance on 2nd Reading o Implementing Resolution o Set Public Hearing For AGREEMENT WITH CHARITABLE VENTURES OF ORANGE COUNTY CONTINUED TO FILE NUMBER RECOMMENDED ACTION Authorize the City Manager and Clerk of the Council to execute the attached agreement with Charitable Ventures of Orange County recognizing its relationship with the City and setting forth the duties and responsibilities of each party, subject to non-substantive changes approved by the City Manager and City Attorney. DISCUSSION In December 2005, the City entered into an agreement with the Orange County Community Foundation (OCCF). The OCCF is a non-profit organization established to administer donations and grants to meet the needs of the Orange County community. The Grants for Parks fund was established with OCCF to expand and improve parks and recreation programs and projects with the assistance of donations from private individuals and organizations. Recently OCCF notified the City that it would no longer manage the Grants for Parks fund due to the increased volume of activity requiring administrative support. OCCF recommended that the City's fund be transferred to Charitable Ventures of Orange County (CVOC), a non-profit agency established in 2007. In staff's communication with CVOC, the staff there has indicated that the large volume of work generated by the City's fundraising events would pose no problem. The City desires to contract with CVOC to establish a non-endowed Agency Fund. CVOC's purpose is to provide resources and support services to charitable ventures and projects in Orange County. The company has appropriate staff available to meet the fundraising needs of the City and provide the level of service required for the Parks, Recreation and Community Services Agency's large volume of projects. The funds received by CVOC would then be distributed to the City to benefit parks and recreation programs and projects in Santa Ana. 25L-1 Agreement with Charitable Ventures of Orange County August 18, 2008 Page 2 FISCAL IMPACT There is no fiscal impact associated with the proposed action. ~r~ Executive Director Parks, Recreation and Community Services Agency 25L-2 Charitable Ventures of Orange County FISCAL SPONSORSHIP AGREEMENT BETWEEN CHARITABLE VENTURES OF ORANGE COUNTY AND THE CITY OF SANTA ANA This Agreement, made this 4th day of August, 2008, by and between Charitable Ventures of Orange County, (hereinafter referred to as "CVOC"), a California nonprofit public benefit corporation located in Santa Ana, California, qualified as exempt form federal income tax under ~501(c)(3) of the Internal Revenue Code, and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the state of California (hereinafter referred to as the "City"). RECITALS: A. The City has established the Grants for Parks Program ("Program") to expand and improve upon existing parks and recreation programs and projects with the assistance of private individuals and organizations. B. CVOC desires to act as the fiscal sponsor of the Program, by receiving assets and incurring liabilities identified with the Program and using them to continue normal operation of the Program, while allowing individuals, businesses and community foundations to donate their gifts directly to a non-profit incorporated under Section 501 (c) (3) of the Internal Revenue Code for Program purposes. THEREFORE, in consideration of their mutual and respective promises, the parties hereto do hereby agree as follows: 1. Term of Agreement: On _(Effective Date) _, 200_, CVOC shall assume operation of the Project, which operation shall continued in effect for five (5) years, unless earlier terminated pursuant to Paragraph 7 below. 2. Creation of Fund/Variance Power. Pursuant to the terms of this Agreement, CVOC shall create a 'Grants for Parks' restricted fund ("the Fund") to receive donations of cash and other property earmarked for support of the Program, and to make disbursements in furtherance of the Program. Beginning on the effective date, CVOC shall place all gifts, grants, contributions, and other revenues received by CVOC and identified with the Program into the Fund to be used for the sole benefit of the Program mission as that mission may be defined by the City from time to time with the approval of CVOc. CVOC retains the unilateral right to spend such funds so as to accomplish the purposes of the Program as nearly as possible with CVOC's sole judgment, subject to any donor-imposed restrictions, as to purpose, on the charitable use of such assets. The parties agree that all money and the fair market value of all property in the restricted fund shall be reported 2101 EAST FOURTH STREET, SUITE 180B. SANTA ANA, CA. 92705 714.647.0900 (PHONE) . (714) 647-0901 (FAX) WWW.CHARITABLEVENTURESOC.ORG.INFO@CHARITABLEVENTURESOC.ORG 25L-3 as the income of CVOC, for both tax purposes and for purposes of CVOC's fmancial statements. It is the intent of the parties that this Agreement be interpreted to provide CVOC with variance powers necessary to enable CVOC to treat the restricted fund as CVOC's assets in accordance with Interpretation No. 42 of Statement No. 116 issued by the Financial Accounting Standards Board, while this Agreement is in effect. 3. Program Activities and Sponsorship Policies. CVOC shall hold, manage, invest and reinvest the Fund, shall collect the income and shall pay and disburse the net income and principal for public educational and charitable uses and purposes. All community programs, public information work, fundraising events, processing and acknowledgment of cash and non-cash revenue items, accounts payable and receivable, negotiation of leases and contracts, disbursement of Program funds (including grants), and other activities related to the Program, shall be the ultimate responsibility of CVOC and shall be conducted in the name of CVOC, beginning on the Effective Date. Unless otherwise agreed, and subject to their consent, all personnel to be compensated for working on the Program shall become at-will employees of CVOC on the Effective Date, and shall be subject to the same personnel policies and benefits as are required by law to apply to all employees of CVOc. Unless otherwise agreed, any tangible or intangible property, including intellectual property, such as copyrights, obtained or created in connection with the Program shall be the property of CVOC while this Agreement is in effect. CVOC shall grant to City a royalty- free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce and use any and all such tangible, intangible and/or intellectual property. Authority to manage the activities of the Program is delegated to the City, subject at all times to the ultimate direction and control of the CVOC Board of Directors. The City shall abide by the Sponsorship Policies of CVOC as set forth on the attached Exhibit I, which may be amended from time to time with the consent of the City, and which include administration fees, as set forth in attached Exhibit 2, to be paid to the general fund of CVOC from the restricted fund described in Paragraphs 2, and 4 herein. 4. Restricted Fund Management / Performance of Charitable Purposes: All of the assets received by CVOC under the terms of this Agreement shall be devoted to the purposes of the Program, within the tax-exempt purposes of CVOc. No item of revenue shall be earmarked to be used in any attempt to influence legislation within the meaning of IRC Section 501 (c) (3); no agreement, oral or written, to that effect shall be made between CVOC and any revenue source. CVOC shall not use any portion of the assets to participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office, to induce or encourage violations of law or public policy, to cause any private inurement or improper private benefit to occur, nor to take any other action inconsistent with IRC Section 501 (c) (3). S. Reporting. CVOC will provide reports to the City quarterly. As part of its regularly scheduled distribution of statements, CVOC will provide the City with a global annual audit and detailed reports insofar as they relate to the money or property transferred to CVOC and distributed by CVOC on behalf of the City. Any separate audit of the Fund and Program will be at the City's cost and expense. 6. Advisory Committee. The Executive Director of Santa Ana's Park's Recreation and Community Services Agency will advise CVOC on the distribution for City parks related projects. If no advisors are able and willing to act, CVOC shall make decisions without advisors. As required by CVOC Fiscal Sponsorship Agreement 25L-4 2 Internal Revenue Service regulations, the CVOC Board of Governors must retain fInal authority and responsibility for determining distributions from the Fund. 7. Termination. This Agreement shall terminate when the objectives of the Program can no longer reasonably be accomplished by CVOc. If the objectives of the Program can still be accomplished, but either the City or CVOC desires to terminate CVOC's fIscal sponsorship of the Program, the following understandings shall apply. Upon such termination any unpaid expenses or unsatisfIed contractual obligations of the Program may be paid or reserved for payment out of the Fund by CVOc. Either CVOC or the City maybe terminate this Agreement on 60 days' written notice to the other party, so long as another nonprofIt corporation, which is tax exempt under IRC Section 501 (c)(3) and is not classifIed as a private foundation under Section 509(a) (a Successor), is willing and able to sponsor the Program and is approved by writing by both parties by the end of the 60 day period. If the parties cannot agree on a Successor to sponsor the Program, the City shall have an additional 60 days to fInd a Successor willing and able to sponsor the Program. If a Successor is found, the balance of assets in CVOC's restricted funds for the Program, together with any other tangible and intangible assets held or liabilities incurred by CVOC in connection with the Program, shall be transferred to the Successor at the end of the notice period or any extension thereof, subject to the approval of any third parties that may be required. If the City has formed a new organization qualifIed to be a Successor as set forth in this paragraph, such organization shall be eligible to receive all such assets and liabilities so long as such organization has received a determination letter from the Internal Revenue Service, including that such qualifIcations have been met, no later than the end of the notice period or any extension thereof. If no Successor is found within the 120 day period, CVOC may dispose of the Program's assets and liabilities in any manner consistent with applicable tax and charitable trust laws, ensuring that the funds are used for a purpose as similar as possible to those set forth in this Agreement. Either party to this Agreement may terminate this Agreement, based upon a material breach of this Agreement by the other party, by giving 30 days' written notice to the other party. 8. Conflict of Interest. CVOC covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specifIed under this Agreement. CVOC maintains other funds and is not working exclusively for the City in relation to this Program. CVOC maintains the right to sponsor other Funds and Programs. 9. Notice. Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by fIrst class or certifIed mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702-1988 telefacsimile (714) 647-6956 CVOC Fiscal Sponsorship Agreement 25L-5 3 With courtesy copies to: Executive Director Parks, Recreation and Community Services City of Santa Ana 888 W. Santa Ana Blvd, Ste 200 P.O. Box 1988 (M-23) Santa Ana, California 92702-1988 telefacsimile (714) 571-4221 To CVOC: Charitable Ventures of Orange County 2101 East Fourth Street, Suite 180B Santa Ana, CA 92705 telefacsimile (714)647-0901 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. Entire Agreement: This Agreement constitutes the only agreement, and supercedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. All Exhibits hereto are a material part of this Agreement and are incorporated by reference. This Agreement, including any Exhibits hereto, may not be amended or modified, except in a writing signed by all parties to this Agreement. 11. Jurisdiction/Venue. This Agreement and all questions relating to its validity, interpretation, performance, and enforcement shall be governm.ent and construed in accordance with the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 12. Miscellaneous. a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. c. All approvals referenced herein must be in writing. CVOC Fiscal Sponsorship Agreement 25L-6 4 d. In the event of any controversy, claim, or dispute between the parties arising out of or related to this Agreement, or the alleged breach thereof, the prevailing party shall, in addition to any other relief, be entitled to recover its reasonable attorneys' fees and costs of sustaining its position. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year fIrst above written. ATTEST: CITY OF SANTA ANA: PATRICIA E. HEALY Clerk of the Council DAVID N. REAM City Manager APPROVED AS TO FORM: CHARITABLE VENTURES OF ORANGE COUNTY JOSEPH W. FLETCHER City Attorney By: Laura Sheedy Assistant City Attorney By: Anne Olin Title: President CVOC Fiscal Sponsorship Agreement 25L-7 5 EXHIBIT 1 PROGRAM SPONSORSHIP GUIDELINES FOR NON-PROFIT 501 (C)(3) ORGANIZATIONS 1. As of the Effective Date of this Agreement, CVOC lends its tax-exempt status to the Program, meaning that the Program becomes a project of CVOC's, subject to all IRS rules and regulations regarding charitable endeavors. 2. Sponsorship services include the provision of non-profit status to the Program (thus making contributions tax-deductible), the receipting and managing of contributions, and the authorization and payment of grants and expenses from the fund created for the project. Sponsorship services do not include administrative or fundraising support, or fmancial support except as otherwise provided in Paragraph 5 below. 3. Once this FSA is effective, a restricted fund bearing the Program's name will be established. The Program is then accounted for as: "The Santa Ana Grants for Parks Fund, a program of CVOC", for IRS auditing, fmancial reporting, marketing, and fundraising purposes. As fiscal sponsor, the fund will be deemed to be a fund of CVOC and CVOC will be legally responsible for the Program's administration, management, and disbursement of funds. 4. CVOC retains the right to approve payments to carry out the purposes of the program. The City may make recommendations for the specific expenditures on behalf of the Program, which CVOC will review, and if approved, will authorize payment. 5. CVOC prepares receipts and acknowledgments for all gifts over $75.00 to the project fund. CVOC will provide quarterly fmancial reports to the City. CVOC will provide grant submittal and packaging support for all grants submitted under the sponsorship agreement. 6. The City may apply to funding sources under the auspices of CVOC, subject to CVOC's prior written approval, but CVOC is not in any way responsible for actual fundraising or for providing fmancial support for the project. CVOC must review in advance all fundraising plans and requests for funding. In addition, all copy referencing CVOC to be used in marketing or fundraising must be approved by CVoc. 7. It is requested that the City credit CVOC in publications and news releases or stories. Likewise, CVOC may give the project mention in newsletters and annual reports of CVOc. CVOC Fiscal Sponsorship Agreement 6 25L-8 EXHIBIT 2 FEE SCHEDULE Fee Schedu 2008 Monthly Maintenance Fund Balance Fee Up to 9,999 $50 10,000 to 24,999 $100 25,000 to 49,999 $150 50,000 to 99,000 $200 Over 100,000 $250 Administrative Allocation Number of Transactions 1 to 15 16 to 25 26 to 40 41 to 55 56 to 75 Over 75 Fee $225 $250 $275 $300 $500 $750 Maintenance of books Year-end audit Income and disbursement management Financial reporting to board of directors Receipts for tax-deductible donations and grants Issue quarterly financial statements Check processing and issuance for expenses, 19s and 1099s Fee paid end of every month. Tier determined by highest value of Client's checking balance. Fee will be reflected on quarterly report, funds transferred automatically. No invoice required. Any checking account transaction Deposit, withdrawal, check generation, etc. Generation of reports (financial. Donor information) Grant review and submittal Receipts sent to donors less than $75, over $75 included with donor deposit transaction 19s and 1099s Check processing Check returned by bank counts as two transactions Administrative consulting and long-term planning Donor Database Management/Reporting Grant and fund development strategic planning * Requires additional contract between client and CVOC, additional fee structure to be negotiated The mission of Charitable Ventures of Orange County is to provide reasonably priced fiscal services to nonprofit initiatives serving Orange County. Charitable Ventures will assess its fee structure on an on- ]going basis. Fees are subject to change. CVOC Fiscal Sponsorship Agreement 7 25L-9 25L-10