HomeMy Public PortalAbout2020-03-10 Item 9CITY COUNCILAGENDA REPORTr0'6€<t.I?2^sVS.IpCITY OF MILLBRAE621 Magnolia AvenueMillbrae, CA 94030SUBJECT: Designated Fund Agreement for the MillbraeRecreation Center Between the MillbraeCommunity Foundation and the City ofMillbraeATTACHMENTS:AgreementReport No. ^^J^>For Agenda of: March 10, 2020Department: RecreationOriginator: Mackenzie_Brady,R^e^it)^DiKCtOTApproved:/^g^,'1^Budget ActionYes:No: XFinance Revl^^:REPORT TYPE: ACTION X INFORMATIONALITEM TYPE: CONSENT „ PUBLIC HEARING _ EXISTING BUSINESS _ NEW BUSINESS^RECOMMENDATION:Staff recommends that the City Council approve, by motion, the proposed Designated Fund Agreementfor the Millbrae Recreation Center between the Millbrae Community Foundation and the City ofMillbrae.BACKGROUND:On July 21, 2016 a major structure fire destroyed the Millbrae Community Center, located in CentralPark at 477 Lincoln Circle. Immediately, the Millbrae Community Foundation (MCF) stepped up tohelp facilitate collecting donations for anyone wishing to help contribute to the rebuilding of the newcommunity center. As of now, MCF has raised approximately $70,000 in the Recreation Center'sDesignated Fund.The recovery of the facility began immediately and activities in 2017 included the demolition of thestructure, the completion of an interim Community Center in a temporary, modular building, andsettlement of insurance claims. In parallel with this recovery effort, a significant public outreachprocess was initiated by the City's master plan architect to take input from the community in theplanning of a new Recreation Center to restore services and meet Millbrae's needs into the future.2018 activities included ongoing study sessions and finalization of the conceptual design. In 2019, theCity saw the finalization of the schematic design for the new facility and the move to a design-buildprocess in lieu of the more costly design-bid-build process. This change also allows the City to obtainbids six to twelve months earlier than previously anticipated and to lock in bid pricing much sooneravoiding future cost escalation.As the time to break ground on the new facility comes closer, the City will commence a fundraisingcampaign to fund the FFE (furniture, fixtures, and equipment) in the new facility. As the City is notconsidered a tax-exempt organization, the partnership with the Millbrae Community Foundation, a501(c)(3) charitable organization, may give individuals or companies donating an added benefit. This, inturn, may encourage individuals to donate more to benefit the restoration of the new Recreation Center.Page 1 of 213853577.1
Both the City of Millbrae and the Millbrae Community Foundation have a common interest in thewelfare of the Millbrae community.The Millbrae Community Foundation was formed to support programs and capital projects necessary tomeet the needs of the residents ofMillbrae. Initially, a small group of dedicated community leaders ledthe foundation and supported the uiimet emergency needs for those affected by winter storms, directedphilanthropic support for the senior van program and provided assistance for improvements to our localschools.Now, a Board of Directors manages the organization. MCF priorities have been set in conjunction withpublic opinion gained from focus group meetings.They are as follows:Support programs that include, but are not limited to, providing assistance for life's basicneeds and beyond through meal programs, senior outreach, programs for children, youth &families, public safety and the preservation of open space in the community to name a few.Partner with other organizations to develop a deep sense of community in Millbrae, bringingpeople together around events that reflect our unique diversity and celebrate the many culturalheritages present in our city.Promote activities that encourage city-wide participation and civic engagement by both residentsand businesses alike, providing a forum for meeting, sharing and exchanging ideas, airing viewsand developing positive resolutions.FISCAL IMPACT:There is no budgetary impact to this action. If approved, a minimum annual fee of $2,500.00 per yearplus the actual cost of any expenses paid by MCF to third parties related to the management of the MCFFunds will be charged. This minimum annual fee includes the processing of receipt and distribution ofthe assets. Board oversight of the MRC Funds, and reporting to the public as to the receipt anddistribution of the MRC Funds. The fees and expenses shall be deducted by MCF from the MillbraeRecreation Center Funds pursuant to the attached Agreement, as expenses of this project.COUNCIL ACTION:Staff recommends that the City Council approve, by motion, the proposed Designated Fund Agreementfor the Millbrae Recreation Center between the Millbrae Community Foundation and the City ofMillbrae.Page 2 of 213853577.1
Designated Fund Agreement for the Millbrae Recreation CenterBetween the Millbrae Community Foundation and the City of MillbraeTHIS AGREEMENT is made as of the _day _, between the City of Millbrae, a municipal corporation in theState of California ("Millbrae") and the Millbrae Community Foundation ("MCF") a 501c3 charitable non-profitcorporation, both of which are situated in the CityofMillbrae, California.WHEREAS both Parties to this Agreement have a common interest in the welfare of the Millbrae community andin serving charitable, scientific, or educational purposes for the benefit of the community;WHEREAS MCF has been established with a principal purpose to receive and administer funds for variouscharitable, scientific or educational purposes and organizations in the Millbrae community; andWHEREAS various interested persons have expressed a desire to establish a fund in the Foundation to providefunding for the project known as the Millbrae Recreation Center ("MRC") restoration, and wish to have thebenefits of a Designated Fund for that purpose.NOW THEREFORE THE PARTIES AGREE:1. Establishment of the Funds. A group of funds shall be established on the books of the Foundation andshall be known as the MILLBRAE RECREATION CENTER RESTORATION FUNDS ("MRC Funds").2. The MRC Funds shall be the exclusive property of the Foundation (MCF), held by it in its corporatecapacity. The Foundation shall have the ultimate authority and control over all assets in the Funds, andincome derived from in accordance with the Articles of Incorporation and Bylaws of the Foundation, aswell as the terms of this Agreement applied in a manner not inconsistent with the Articles and Bylaws.3. The MRC Funds shall have three primary divisions: 1) a general fund for reimbursement of approvedexpenses and replacement of furniture, fixtures, and equipment for the MRC, referred to as the "MRCFF&E Fund"; 2) a fund designated by the donor for certain aspects of the MRC Restoration Project (the"MRC Donor Directed Fund"; 3) a fund comprised of monies from commercial sponsors which may be fora specific aspect of the MRC Restoration Project or for the general Restoration Project the "MRCSponsorship Fund".4. MCF shall provide a Grant to Millbrae, as defined below, of monies coming from the respective Funds forthe purposes as shall be determined in consultation with Millbrae and as may be restricted by the donorof such monies.5. TERMS:012120MCFCityAgmt116176894.1
a. The City of Millbrae, will be designated as the Receiving Agency of the MRC Funds, upon theapplication for a Grant from MCF, and, following receipt of the said funds, Millbrae hereby agreesto provide on a quarterly basis a written accounting of how the distributed funds were used,together with supporting documentation such as receipts or paid invoices.. Millbrae shall usesuch funds for the purposes set forth in the Grant for such funds. The Grant shall recite from whichof the three Funds the Grant is made and for what purpose such funds may be used.b. MCF will receive all monies designated for the MRC Funds, and may deposit monies in a separateinterest- bearing account and make distributions to Millbrae upon written request fromauthorized representatives of Millbrae for a Grant, using the Grant Application Form as may bespecified by MCF.c. MCF will provide a statement of the various Fund accounts quarterly upon request.d. MCF will provide all gift acknowledgements in accordance with IRS regulations, however, donorsshall be required to consult with their own tax advisors as to the tax effects of theircontributions.e. Millbrae shall indemnify MCF and its Board Members, and hold them harmless against any claim,cause of action, or demand from any third party with regard to the disposition of the MRC Fundsto Millbrae, and any project of Millbrae which has been paid for by the Funds except for any suchclaim, cause of action, or demand arising from the sole gross negligence or willful misconduct ofthe MCF. This indemnity shall continue until the termination date of the Agreement plus twoyears unless extended by mutual agreement of the parties.f. MCF shall indemnify Millbrae, its councilmembers and staff, and hold them harmless against anyclaim, cause of action, or demand from any third party with regard to MCF's possession of funds,management of funds, loss of funds, or other such losses as may occur during performance ofMCF functions as covered under paragraph 2 of this agreement. This indemnity shall not apply toa loss of funds due to a change in interest rates, an investment loss by the asset manager, or othersimilar matters outside the control of the MCF.g. Millbrae shall provide information to the public which gives recognition that MCF is acting as acharitable partner in this matter with Millbrae.6. FEE FOR SERVICE:MCF's management fee for the designated fund is as follows:i. A minimum annual fee of $2,500.00 per year plus the actual cost of any expenses paidby MCF to third parties related to the management of the MCF Funds,such as the costof tax filing preparation, insurance, employment of an investment advisor, and inaddition, the fee charged by an asset management company to handle the investmentof the MRC Funds assets, which asset management fee shall not exceed 1% of theaverage balance of the Funds each calendar year.ii. This minimum annual fee includes the processing of receipt and distribution of theassets. Board oversight of the MRC Funds, and reporting to the public as to the receiptand distribution of the MRC Funds.012120MCFCityAgmt216176894.1
iii. The fees and expenses shall be deducted by MCF from the MRC Funds pursuant to thisAgreement, as expenses of this project.7. LENGTH OF AGREEMENT. This agreement will be in force from the commencement date until 5 yearsafter execution by both parties, unless extended by mutual agreement of the parties.8. The agreement may be extended by mutual agreement of both parties prior to the termination date.9. This agreement may be modified by mutual agreement of both parties.10. Millbrae shall report annually to MCF, and quarterly once Millbrae begins receiving these funds,verifying that the funds received have been used for the purposes consistent with the purposes forwhich such funds were granted by MCF.11. This agreement constitutes the entire understanding and agreement of the parties as to the matters setforth in this agreement. No alteration of or amendment to this agreement shall be effective unless givenin writing and signed by the party or parties sought to be charged or bound by the alteration oramendment.12. The parties executing this document covenant and warrant that the person executing this document isfully authorized to do so, and that this agreement shall be construed as a fully binding contract betweenthe parties referenced herein. The signatories hereto warrant on behalf of the entity for which he/she isauthorized to act that execution of this agreement does not and shall not with the passage of time violateany provisions of law, of their respective corporate documents or of their respective trust documents.13. This Agreement shall become binding upon signature by MCF and ratification by the Millbrae City Council.14. NOTICES: All notices, requests, demands, and other communications to be made or given under thisAgreement shall be in writing and either personally delivered or deposited in the United States mail first-class, certified or registered, postage prepaid and properly addressed as follows:Millbrae Community Foundationc/o PresidentPO Box 1612Millbrae,CA 94030With a copy to: Janet FogartyJanet Fogarty & AssociatesPO Box 1579Millbrae,CA 94030City of MillbraeAttn: City Manager621 Magnolia Ave.012120MCFCityAgmt316176894.1
Millbrae, CA 94030-0328With a copy to : Joan CassmanHanson Bridgett LLP425 Market Street, 26th FloorSan Francisco, CA 94105All notices shall be deemed received on the dateof delivery if personally served or three (3) business daysafter they are deposited in the United States Mail as provided herein. Either party may change the addressestablished for it above by notifying the other party of the change as herein provided.15. SEVERABILITY: If any term of this Agreement, shall to any extent be invalid or unenforceable, theremainder of this Agreement, or the application of such term to persons or circumstances other thanthose to which it is invalid and unenforceable, shall not be affected thereby, and in such event thisAgreement shall be construed to the extent necessary as if such invalid or unenforceable provision hadnever been contained herein.The foregoing is hereby agreed to:MILLBRAE COMMUNITY FOUNDATIONBy:Its:CITY OF MILLBRAEBy:Its:Approved as to form:City Attorney012120MCFCityAgmt416176894.1