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Home My WebLink About25B - AGMT - DOWNTOWN ASSOC - BUSINESS IMPROV DISTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: AUGUST 4, 2015 TITLE: SECOND AMENDMENT TO BUSINESS IMPROVEMENT DISTRICT (BID) OPERATING AGREEMENTS (STRATEGIC PLAN NO. 3,4) CITY MANAGER RECOMMENDED ACTION NNEEME CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 10 Reading ❑ Ordinance on a Reading ❑ implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO FILE NUMBER Authorize the City Manager and the Clerk of the Council to execute the attached Second Amendment to the operating agreements with Downtown Inc. and the Santa Ana Business Council Inc., to increase the revolving fund account to a total amount of $40,000 for each entity, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION On September 16, 2013, the City executed agreements with Downtown Inc. (DTI) and the Santa Ana Business Council Inc. (SABC), for the programming and distribution of the Downtown Santa Ana Business Improvement District (BID) assessment funds. The agreements contained provisions to ensure proper administration and distribution of the funds, such as those pertaining to the annual budget, financial record keeping, fund distribution, board composition and meeting requirements. The term of those agreements are set to terminate on September 16, 2016. On January 7, 2014, the City executed an amendment to the operating agreement to establish a revolving fund account in the amount of $20,000 in order to finance the organizations' day to day operations. This revolving fund provided upfront BID funds to each group for the administration of their marketing and promotional activities. On June 18, 2015, the City received a letter (Exhibit 3) from the University of California, Irvine School of Law, indicating that they were representing both the SABC and DTI. The letter requested that the revolving fund be increased to $40,000 to allow additional flexibility for both organizations' budgets. This will allow both organizations to pay vendors and consultants upfront as they are waiting for the City to reimburse their accounts for past events and promotional activities. 25B -1 2nd Amendment to BID Operating Agreements August 4, 2015 Page 2 As of June 30, 2015, DTI has approximately $91,518 and SABC has $155,991 left in their BID accounts to expend. The 2016 BID renewal process will begin in the Fall of the current year. New operating agreements for both business associations will be taken to City Council for approval in mid -2016 if all parties wish to continue with the BID. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 Economic Development, Objective #4, (Continue to pursue objectives that shape downtown Santa Ana into a thriving, culturally diverse, shopping, dining, and entertainment destination). FISCAL IMPACT There is no direct fiscal impact to the City associated with this action as the BID assessment revenues are held in trust on behalf of the two organizations. However, if the amendments are approved, funds for the increase in the revolving funds are available in the Trust and Agency Fund in the current FY 2015116; $20,000 in 09301001 -24036 for DTI and $20,000 in 09301001- 24043 for SABC. Kelly Reenli,. ,% Executive Director Community Development Agency KR/MM /sb APPROVED AS TO FUNDS AND ACCOUNTS: l/ Fr ncisco G errez 5R Executive Director Finance & Management Services Agency Exhibit: 1. 2nd Amendment to Operating Agreement — DTI 2 2nd Amendment to Operating Agreement — SABC 3. Letter from UCI School of Law requesting $40,000 in revolving fund 25B -2 SECOND AMENDMENT TO OPERATING AGREEMENT THIS SECOND AMENDMENT TO OPERATING AGREEMENT, made and entered into on , 2015, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, hereinafter referred to as "City," and Downtown Incorporated, Inc., a California non - profit corporation, hereinafter referred to as "DTI." RECITALS A. City and DTI entered into Operating Agreement #A- 2013 -150, dated September 17, 2013, to (1) confirm that DTI will receive 50% of the assessments collected each calendar year for which an assessment is levied, (2) to provide that DTI's use of the assessment funds will be consistent with the requirements of NS -1715, generally, and the approved calendar year's assessment report specifically, (3) to provide for auditing of DTI BID Funds, and (4) ensure that DTI meetings are compliant with the Ralph M. Brown Act [Government Code Sections 54950, et seq.]. B. City and DTI entered into Amended and Restated Operating Agreement #A -2014- 019, dated January 9, 2014, hereinafter referred to as "said Agreement ". C. In accordance with the terms and conditions of said Agreement, the Parties desire to increase the amount of and add funds to the `revolving fund" and address the reimbursement process. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions of said Agreement, except as herein modified, the parties agree as follows: Section 2.01(f) shall be deleted in its entirety since the applicable timeframe has expired. 2. Section 2.01(g) shall be amended to increase the maximum amount of the `revolving fund" account from $20,000 to $40,000. Consistent with the increase in the maximum amount of this fund, the City shall add an additional $20,000 to the `revolving fund" for a maximum total of $40,000. 3. Section 2.01(m) shall be amended to provide the City with three (3) weeks to process reimbursement requests from DTI, which shall commence upon the City's receipt of notice and all required documentation. 4. Except as hereinabove modified, all terms and conditions of said Agreement shall remain in full force and effect. EXHIBIT 1 25B -3 IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Operating Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: I Ryan CITY OF SANTA ANA DAVID CAVAZOS City Manager DOWNTOWN INC. 25B -4 SECOND AMENDMENT TO OPERATING AGREEMENT THIS SECOND AMENDMENT TO OPERATING AGREEMENT, made and entered into on , 2015, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, hereinafter referred to as "City," and Santa Ana Business Council Inc., a California non - profit corporation, hereinafter referred to as "SABC." RECITALS A. City and SABC entered into Operating Agreement #A- 2013 -151, dated September 17, 2013, to (1) confirm that SABC will receive 50% of the assessments collected each calendar year for which an assessment is levied, (2) to provide that SABC's use of the assessment fimds will be consistent with the requirements of NS -1715, generally, and the approved calendar year's assessment report specifically, (3) to provide for auditing of SABC BID Funds, and (4) ensure that SABC meetings are compliant with the Ralph M. Brown Act [Government Code Sections 54950, et seq.]. B. City and SABC entered into Amended and Restated Operating Agreement #A -2014- 020, dated January 9, 2014, hereinafter referred to as "said Agreement ". C. In accordance with the terms and conditions of said Agreement, the Parties desire to increase the amount of and add fonds to the "revolving fund" and address the reimbursement process. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions of said Agreement, except as herein modified, the parties agree as follows: 1. Section 2.01(f) shall be deleted in its entirety since the applicable timeframe has expired. 2. Section 2.01(g) shall be amended to increase the maximum amount of the "revolving fund" account from $20,000 to $40,000. Consistent with the increase in the maximum amount of this fund, the City shall add an additional $20,000 to the `revolving fund" for a maximum total of $40,000. Section 2.01(m) shall be amended to provide the City with three (3) weeks to process reimbursement requests from SABC, which shall commence upon the City's receipt of notice and all required documentation. 4. Except as hereinabove modified, all terms and conditions of said Agreement shall remain in full force and effect. EXHIBIT 2 25B -5 IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to Operating Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City AttSWy. By: Ryan r CITY OF SANTA ANA DAVID CAVAZOS City Manager SANTA ANA BUSINESS COUNCIL, INC. Cy #V- tPIII - Uht -A1 Ii IMM'v IM 1ti I Ar aSf i -•: av - ♦R�.:fla�NiRCFU.u141- PV16e. SiV Plf.ru�Sih Community & Economic Development Clinic University of California, Irvine School of Law June 24, 2015 Marc Morley Economic Development Specialist The City of Santa Ana 20 Civic Center Plaza M -25 Santa Ana, CA 92701 Re: SABC and Downtown, Inc. Revolving Accounts Dear Mr. Morley: eati:'t fl�kf \N a�Yl51 >t E't PO Box 5479 Irvine, CA 92616 -5479 (949) 824 -9660 We represent the Santa Ana Business Council, Inc. ( "SABC ") in its legal matters. We are writing you on behalf of both SABC and Downtown, Inc. ( "Downtown "). Both SABC and Downtown have been working closely with City Manager David Cavazos. Both organizations are pleased with their partnership with the City, axe excited about the great things happening in Santa Ana. As you know, both SABC and Downtown currently receive a revolving $20,000 advance. However, both organizations have continued to have problems with using their allotted funds because of the City's reimbursement policy. In particular, the City's policy is that SABC and Downtown must pay vendors before present the invoice to the City for reimbursement. However, reimbursement from the City often takes weeks. This leaves' both SABC and Downtown without any funds in their account for long periods while they are waiting for the reimbursement of funds. During these times both SABC and Downtown effectively must shut down until they receive sufficient funds to continue operation. To solve this serious issue, SABC and Downtown respectfully request that their respective revolvine accounts be increased to $40.000. The total annual amount allotted to each organization would remain the same, however, increasing the advance amount would give both organizations the flexibility to function how they need to and still comply with the City's reimbursement protocol. Sincerely, Bob Solomon, Esq. Professor At Law Beau Walker Certified Law Student Darlene Gonzalez Masters in Urban Planning Student EXHIBIT 3 25B -7 r -oo