• The Town met its 2020 SB X7-7 water-use target in 2020 and continues to implement the demand-management and water-efficiency programs (water conservation programs) described in the 2025 UWMP.
PUBLIC REVIEW AND NOTICING
The Town notified BAWSCA, BAWSCA member agencies, San Mateo County, and the SFPUC more than 60 days in advance that Hillsborough would review the UWMP and WSCP and consider amendments or changes. Notice of the public hearing was published in the local newspaper on July 24, 2026 and July 31, 2026, pursuant to California Water Code section 10642 and Government Code section 6066 and 7290 et seq., and in accordance with the Hillsborough Municipal Code. The draft 2025 UWMP and 2025 WSCP were made available for public inspection in Town Hall and on the Town’s website (www.hillsborough.net). A notice of availability and the public hearing were also provided to San Mateo County, BAWSCA, BAWSCA member agencies and the SFPUC.
ADOPTION TIMING
The statutory deadline for the 2025 UWMP cycle was July 1, 2026. Hillsborough notified the California Department of Water Resources (DWR) by letter on June 30, 2026 that Hillsborough’s UWMP and WSCP were scheduled for adoption on August 10, 2026. On June 30, 2026, DWR Urban Water Management Planning staff replied that Hillsborough’s letter and adoption schedule “is well received”.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: Under California Water Code section 10652, the California Environmental Quality Act (CEQA) does not apply to the preparation and adoption of the 2025 Urban Water Management Plan or the 2025 Water Shortage Contingency Plan. Any future project identified in or undertaken to implement the plans will be subject to separate environmental review to the extent required by law.
ATTACHMENT(S):
1. Resolution Adopting the Town of Hillsborough 2025 Water Shortage Contingency Plan
2. Resolution Adopting the Town of Hillsborough 2025 Urban Water Management Plan
3. Draft Town of Hillsborough 2025 Water Shortage Contingency Plan
4. Draft Town of Hillsborough 2025 Urban Water Management Plan PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION:
1. Open the public hearing and receive and consider oral testimony and written comments on the draft 2025 Water Shortage Contingency Plan and draft 2025 Urban Water Management Plan;
2. Close the public hearing;
3. Consider and direct staff of any revisions to the draft plans based on comments received;
4. Adopt the resolution adopting the Town of Hillsborough 2025 Water Shortage Contingency Plan, as presented or amended by the City Council; and
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Agenda Staff Report – Hillsborough City Council
August 10, 2026
5. Adopt the resolution adopting the Town of Hillsborough 2025 Urban Water Management Plan, as presented or amended by the City Council.
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RESOLUTION NO. 26-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH ADOPTING THE TOWN OF HILLSBOROUGH 2025 WATER SHORTAGE
CONTINGENCY PLAN
WHEREAS, The California Urban Water Management Planning Act, (Wat. Code §10610, et seq.) (the Act) mandates that every urban water supplier providing water for municipal purposes to more than 3,000 customers or supplying more than 3,000 acre feet of water annually, prepare and adopt, in accordance with the prescribed requirements, a Water Shortage Contingency Plan (WSCP) as part of its Urban Water Management Plan (Plan); and
WHEREAS, the Act specifies the requirements and procedures for adopting such WSCPs; and
WHEREAS, urban water suppliers are required to adopt and electronically submit their WSCPs to the California Department of Water Resources (DWR) by July 1, 2026; and
WHEREAS, pursuant to the Act, “urban water supplier” means a supplier, either publicly or privately owned, providing water for municipal purposes either directly or indirectly to more than 3,000 customers or supplying more than 3,000 acre-feet of water annually; and
WHEREAS, the Town of Hillsborough (“Town”) meets the definition of an urban water supplier for purposes of the Act because it provides municipal water to more than 3,000 customers and is required to prepare and adopt a WSCP as part of its 2025 UWMP; and
WHEREAS, the 2025 WSCP updates the Town's 2020 WSCP, which the City Council adopted by Resolution No. 21-69 on August 9, 2021; and
WHEREAS, the Public Works Department has prepared a WSCP in accordance with the Act, and in accordance with applicable legal requirements, has undertaken certain coordination, notice, public involvement, public comment, and other procedures in relation to its WSCP; and WHEREAS, in accordance with the Act, the Public Works Department prepared the 2025 WSCP using the 2025 Urban Water Management Plan Guidebook issued by the California Department of Water Resources (DWR) and information provided by Town departments, the San Francisco Public Utilities Commission (SFPUC), the Bay Area Water Supply and Conservation Agency (BAWSCA), and other planning sources as well as the assistance of consulting professionals and has utilized and relied upon industry standards and the expertise of industry professionals in preparing its WSCP; and
ATTACHMENT 1
-321-
Resolution No. 26-
August 10, 2026
2 WHEREAS, the 2025 WSCP considers the dry-year shortage scenarios evaluated in the Town's 2025 Urban Water Management Plan, establishes six shortage levels and corresponding response actions, and is a stand-alone plan included as an appendix to the Urban Water Management Plan that may be amended separately; and
WHEREAS, in accordance with applicable law, including Water Code section 10621(b), a Notice of Plan Preparation was sent to the county and cities within which the Town provides water supplies at least 60 days before the required public hearing on its WSCP, on August 10, 2026; and
WHEREAS, the Town additionally notified BAWSCA, BAWSCA member agencies, San Mateo County, and the SFPUC more than 60 days in advance that Hillsborough would review the UWMP and WSCP and consider amendments or changes; and
WHEREAS, beginning July 24, 2026, the draft 2025 UWMP and draft 2025 WSCP were available for public inspection at Town Hall and on the Town's website; notice of the time and place of the public hearing was published on July 24, 2026 and July 31, 2026 pursuant to California Water Code section 10642 and Government Code section 6066 and 7290 et seq., and was provided to San Mateo County, BAWSCA, BAWSCA member agencies and the SFPUC; and
WHEREAS, in accordance with applicable law, including but not limited to Water Code Section 10642, a public hearing was held on August 10, 2026, in the City Council Chambers at Town Hall at 1600 Floribunda Avenue, Hillsborough, CA 94010 and via Zoom with participation instructions included on the Town’s website, in order to provide members of the public and other interested entities with the opportunity to be heard in connection with the proposed adoption of its WSCP and issues related to, and during which the City Council received a staff presentation, conducted and closed a public hearing, considered all oral testimony and written comments, determined whether revisions to the 2025 UWMP were warranted, and thereafter considered this Resolution as a separate adoption agenda item; and
WHEREAS, pursuant to said public hearing on the WSCP, the Town and City Council, among other things, encouraged the active involvement of diverse social, cultural, and economic members of the community within the Town’s service area with regard to the WSCP, and encouraged community input regarding the WSCP; and
WHEREAS, the Town and City Council have reviewed and considered the purposes and requirements of the Act, the contents of the WSCP, and the documentation contained in the administrative record in support of the -322-
Resolution No. 26-
August 10, 2026
3 WSCP, and has determined that the factual analyses and conclusions set forth in the WSCP are legally sufficient; and
WHEREAS, the Town and City Council desire to adopt its WSCP and to incorporate it as part of its 2025 UWMP prior to July 1, 2026 in order to comply with the Act; and
WHEREAS, California Water Code section 10652 provides that the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) does not apply to the preparation and adoption of its 2025 WSCP.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby:
1. Finds that the foregoing recitals are true and correct and incorporates them into this Resolution as findings.
2. Adopts the Town of Hillsborough 2025 WSCP, in the form presented to the City Council, as modified by any revisions as a result of input received (if any) at the public hearing, approved by the City Council following the public hearing, for inclusion as an appendix to the Town's 2025 Urban Water Management Plan, with the final adopted plan to be maintained on file with the City Clerk.
3. Directs staff to include a copy of this Resolution in the Town’s WSCP and/or in the Town’s 2025 Plan.
4. Directs staff, in accordance with Water Code section 10644(a)(1), to submit a copy of the WSCP, as part of its 2025 UWMP, to the California State Library, and to any county or city within which the Town provides water supplies no later than thirty (30) days after this adoption date.
5. Directs staff, in accordance with Water Code sections 10632(c) and 10645(b), to make the adopted 2025 WSCP available to the Town's customers and any city or county within which the Town provides water supplies no later than 30 days after adoption and further to make the WSCP available for public review at the City Council offices during normal business hours and on its website at https://www.hillsborough.net/263/Water-Supply no later than thirty (30) days after filing a copy of the WSCP, as part of its 2025 UWMP, with DWR.
6. Directs staff to implement the WSCP in accordance with the Act and to provide recommendations to the Town and City Council regarding the necessary budgets, procedures, rules, regulations, or further actions to carry out the effective and equitable implementation of the WSCP.
7. Finds and determines that this resolution is not subject to CEQA pursuant to Water Code Section 10652 because CEQA does not apply to the preparation and adoption of a WSCP or to the implementation of the actions taken pursuant -323-
Resolution No. 26-
August 10, 2026
4 to a WSCP. Because this resolution comprises the Town and City Council’s adoption of its WSCP and involves its implementation, no CEQA review is required.
8. Directs staff to file a Notice of Exemption with the San Mateo County Clerk’s Office within five (5) working days of adoption of this resolution.
9. The document and materials that constitute the record of proceedings on which this resolution and the above findings have been based are located at 1600 Floribunda Avenue, Hillsborough, CA 94010 and the custodian for these records is the City Clerk.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 10th day of August 2026, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-324-
RESOLUTION NO. 26-
RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH ADOPTING THE TOWN OF HILLSBOROUGH 2025 URBAN WATER MANAGEMENT PLAN
WHEREAS, The California Urban Water Management Planning Act, (Wat. Code § 10610, et seq. (the Act)), mandates that every urban supplier of water providing water for municipal purposes to more than 3,000 customers or supplying more than 3,000 acre feet of water annually, prepare, and adopt an Urban Water Management Plan (Plan);
WHEREAS, the Act generally requires that said Plan be updated and adopted least once every five years on or before July 1, in years ending in six and one; and
WHEREAS, pursuant to recent amendments to the Act, urban water suppliers are required to update and electronically submit their 2025 Plans to the California Department of Water Resources (DWR) by July 1, 2026 WHEREAS, pursuant to Water Conservation Act of 2009, also referred to as SB X7-7 (Wat. Code § 10608 et seq.), an “urban retail water supplier” is defined as a water supplier that directly provides potable municipal water to more than 3,000 end users or that supplies more than 3,000 acre feet of potable water annually at retail for municipal purposes, and an “urban wholesale water supplier” is defined as a water supplier that provides more than 3,000 acre feet of water annually at wholesale for potable municipal purposes; and
WHEREAS, the Town of Hillsborough (the “Town”) meets the definition of an urban retail water supplier for purposes of the Act and SB-X7-7 because it directly provides potable municipal water to more than 3,000 end users; and
WHEREAS, the City Council adopted the 2025 Plan by Resolution No. 21-68 on August 9, 2021; and
WHEREAS, the Town, in accordance with applicable legal requirements, has undertaken certain coordination, notice, public involvement, public comment, and other procedures in relation to its 2025 Plan; and WHEREAS, in accordance with the Act and SB X7-7, the Public Works Department has prepared its 2025 Plan with its own staff, with the assistance of consulting professionals, and in cooperation with other governmental agencies, and has utilized and relied upon industry standards and the expertise of industry professionals in preparing its 2025 Plan, and has also utilized the 2025 Urban Water Management Plan Guidebook issued by DWR and information provided by Town departments, the San Francisco ATTACHMENT 2
-325-
Resolution No. 26-
August 10, 2026
2 Public Utilities Commission (SFPUC), the Bay Area Water Supply and Conservation Agency (BAWSCA), and other planning sources; and WHEREAS, the 2025 UWMP concludes that normal-year water supplies and supplies evaluated for the 2026-2030 Drought Risk Assessment are projected to be sufficient under the assumptions used, while identifying potential long-term dry-year shortfalls if the Bay-Delta Plan Amendment is implemented and noting uncertainty regarding the timing and manner of implementation; and
WHEREAS, the Town's 2025 WSCP is a stand-alone plan included as an appendix to the 2025 UWMP and was adopted by separate resolution considered before this Resolution; and
WHEREAS, in accordance with applicable law, including Water Code section 10621(b), a Notice of Plan Preparation was sent to the county and cities within which the Town provides water supplies at least 60 days before the required public hearing on its 2025 Plan on August 10, 2026; and WHEREAS, the Town of Hillsborough notified BAWSCA, BAWSCA member agencies, San Mateo County, and the SFPUC more than 60 days in advance that Hillsborough would review the UWMP and WSCP and consider amendments or changes;
WHEREAS, beginning July 24, 2026, the draft 2025 UWMP and draft 2025 WSCP were available for public inspection at Town Hall and on the Town's website; and
WHEREAS, a Notice Public Hearing was published on July 24, 2026 and July 31, 2026 pursuant to California Water Code section 10642 and Government Code sections 6066 and 7290 et seq., and was provided to San Mateo County, BAWSCA, BAWSCA member agencies and the SFPUC; and WHEREAS, in accordance with applicable law, including but not limited to Water Code section 10608.26 a public hearing was held in person and by Webconference/Teleconference (via Zoom), on August 10, 2026 in order to provide members of the public and other interested entities with the opportunity to be heard in connection with proposed adoption of the 2025 Plan and issues related thereto and thereafter considered this Resolution as a separate adoption agenda item; and
WHEREAS, pursuant to said public hearing on the Town’s Plan, and in accordance with Water Code Section 10642, the Town, among other things, encouraged the active involvement of diverse social, cultural, and economic members of the community within the Town’s service area with regard to the 2025 Plan and encouraged community input regarding the Town’s 2025 Plan; and
-326-
Resolution No. 26-
August 10, 2026
3 WHEREAS, the Town and City Council desire to adopt the 2025 Plan prior to July 1, 2026 in order to comply with the Act and SB X7-7; and
WHEREAS, California Water Code section 10652 provides that the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) (CEQA) does not apply to the preparation and adoption of the 2025 UWMP, pursuant to this part.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby:
1. Finds that the foregoing recitals are true and correct and incorporates them into this Resolution as findings.
2. Adopts the Town of Hillsborough 2025 Urban Water Management Plan, in the form presented to the City Council, as modified by any revisions approved by the City Council following the public hearing, including, as an appendix, the separately adopted 2025 Water Shortage Contingency Plan, with the final adopted 2025 UWMP to be maintained on file with the City Clerk.
3. Is authorized and directed to include a copy of this Resolution in the Town’s 2025 Plan.
4. Directs the Director of Public Works to, no later than 30 days after the adoption date, submit the adopted 2025 Urban Water Management Plan, including the adopted 2025 Water Shortage Contingency Plan electronically to DWR with the standardized forms, tables, or displays specified by DWR and submit a copy to the California State Library and any city or county within which the Town provides water supplies, in accordance with California Water Code section 10644(a)(1).
5. Directs staff to make both plans available for public review during normal business hours or on the Town’s website at https://www.hillsborough.net/263/WaterSupply no later than 30 days after filing with DWR, in accordance with California Water Code section 10645(a).
6. Directs staff to, in accordance with Water Code Section 10635(c), to provide that portion of the 2025 Plan prepared pursuant to Water Code Section 10635(a)-(b) to any city or county within which the Town provides water supplies no later than sixty (60) days after submitting a copy of the Plan with DWR.
7. Directs staff to implement the 2025 Plan in accordance with the Act and SB X7-7 and to provide recommendations to the City Council regarding the necessary budgets, procedures, rules, regulations, or further actions to carry out the effective and equitable implementation of the 2025 Plan.
8. Finds and determines that this resolution is not subject to CEQA pursuant to Water Code Section 10652 because CEQA does not apply to the preparation and adoption, including addenda thereto, of an urban water management plan. -327-
Resolution No. 26-
August 10, 2026
4 Because this resolution comprises the City Council and the Town’s adoption of the 2025 Plan, no CEQA review is required.
9. Directs staff, pursuant to CEQA, to file a Notice of Exemption with the County Clerk’s office within five (5) working days of adoption of this resolution.
10. The document and materials that constitute the record of proceedings on which this resolution and the above findings have been based are located at 1600 Floribunda Avenue, Hillsborough, CA 94010. The custodian for these records is the City Clerk.
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 10th day of August 2026, by the following vote of the members thereof:
AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-328-
ATTACHMENT 3 & 4
The following documents are available on the Town’s Water Supply webpage (https://www.hillsborough.net/263/Water-Supply):
• Draft Town of Hillsborough 2025 Water Shortage Contingency Plan a. Appendix A
b. Appendix B
• Draft Town of Hillsborough 2025 Urban Water Management Plan a. Appendices
-329-
TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
19 NEW BUSINESS
CITY COUNCIL MEETING
AUGUST 10, 2026
AGENDA STAFF REPORT
ITEM SUBJECT: Designation of a Voting Delegate and Alternate Voting Delegate(s) to the 2026 League of California Cities Annual Conference and Expo September 23-25, 2026 SUMMARY: The League of California Cities (Cal Cities) Annual Conference will be held September 23- 25, 2026 at the Anaheim Convention Center. An important part of the Annual Conference is the General Assembly on Friday, September 25th at 8:30 a.m. The General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. The appointed voting delegate plays an important role during the General Assembly by representing the Town and voting on resolutions. Resolutions approved by the General Assembly become Cal Cities policy.
To cast a vote during the General Assembly, the Town must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity.
Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the City Council. The designees must be registered attendees of the conference. In order to cast a vote, at least one voter must be present at the business meeting and in possession of the voting delegate card.
Following City Council action on this item, the City Clerk will submit the delegate information electronically via the Cal Cities Portal.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENT(S):
1. Annual Conference Voting Guidelines
2. Cal Cities Resolutions and General Assembly Flowchart PREPARED BY: Lisa Natusch, City Clerk
RECOMMENDATION: Designate a voting delegate and alternate(s) for the 2026 League of California Cities Annual Conference General Assembly on Friday, September 25, 2026. -330-
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org General Assembly Voting Guidelines
1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.
2. Designating a City Voting Representative. Prior to the Cal Cities Annual Conference and Expo, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the voting delegate form provided to the Cal Cities Credentials Committee.
3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the voting delegate desk in the conference registration area. Voting delegates and alternates must sign in at the voting delegate desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the General Assembly.
4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the credentials committee at the voting delegate desk, may sign petitions to initiate a resolution.
5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and voting tool; and be registered with the credentials committee. The voting card may be transferred freely between the voting delegate and alternates but may not be transferred to another city official who is neither a voting delegate nor alternate.
6. Voting Area at General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.
7. Resolving Disputes. In case of dispute, the credentials committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the General Assembly.
ATTACHMENT 1
-331-
Sixty days before the
Annual Conference
and Expo, Cal Cities
members may submit
policy proposals on
issues of importance
to cities. The resolution must
have the concurrence of at least
five additional member cities or
individual members.
General Assembly
General Resolutions Policy Committees
Developing League of California Cities policy is a dynamic process that engages a wide range of members to ensure Cal Cities represents cities with one voice. These policies directly guide Cal Cities’ advocacy to promote local decision-making, and lobby against statewide policies that erode local control.
The resolutions process and General Assembly is one way that city officials can directly participate in the development of Cal Cities policy. If a resolution is approved at the General Assembly, it becomes official Cal Cities policy. Here’s how resolutions and the General Assembly work.
The petitioned
resolution is an
alternate method
to introduce policy
proposals during
the annual conference. The
petition must be signed by
voting delegates from 10% of
member cities, and submitted to
the Cal Cities President at least
24 hours before the beginning
of the General Assembly.
Petitioned Resolutions
The Cal Cities
President assigns
general resolutions
to policy committees
where members
review, debate, and recommend
positions for each policy proposal.
Recommendations are forwarded
to the Resolutions Committee.
Who’s who
The Resolutions Committee
includes representatives
from each Cal Cities
diversity caucus, regional
division, municipal
department, and policy
committee, as well as
individuals appointed by
the Cal Cities president.
Voting delegates
are appointed by each
member city; every city
has one voting delegate.
The General Assembly is a
meeting of the collective
body of all voting
delegates —one from
every member city.
Seven policy committees
meet throughout the year
to review and recommend
positions to take on bills
and regulatory proposals.
Policy committees include
members from each Cal
Cities diversity caucus,
regional division, and
municipal department,
as well as individuals
appointed by the Cal
Cities president.
During the General Assembly, voting delegates
debate and consider general and petitioned
resolutions forwarded by the Resolutions
Committee. Potential Cal Cities bylaws
amendments are also considered at this meeting.
Cal Cities policy
development is a memberinformed process,
grounded in the voices and
experiences of city officials
throughout the state.
For more information visit www.calcities.org/general-assembly Prior to the Annual Conference and Expo
Resolutions Committee
The Resolutions
Committee considers
all resolutions. General
Resolutions approved1 by
either a policy committee
or the Resolutions Committee are next
considered by the General Assembly.
General resolutions not approved, or
referred for further study by both a
policy committee and the Resolutions
Committee do not go to the General
Assembly. All Petitioned Resolutions
are considered by the General
Assembly, unless disqualified.2
During the Annual Conference and Expo
1 The Resolution Committee can amend a general resolution prior to sending it to the General Assembly. 2 Petitioned Resolutions may be disqualified by the Resolutions Committee according to Cal Cities Bylaws Article VI. Sec. 5(f).
How it works: Cal Cities Resolutions
and the General Assembly
ATTACHMENT 2
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
20 DISCUSSION
CITY COUNCIL MEETING
AUGUST 10, 2026
AGENDA STAFF REPORT
ITEM SUBJECT: Discussion to Establish a Nonprofit or Other Program to Accept and Distribute Donation Funds
Summary: At the 2026 annual City Council Goal Setting Session, the City Council directed staff to evaluate the formation of a nonprofit to support funding for various Town initiatives including, but not limited to, the Memorial Day Parade, funding capital projects, or other opportunities to be identified. This report outlines the current mechanisms employed by the Town to accept donations, options for consideration (including the establishment of a nonprofit, tax-exempt organization), and the advantages and disadvantages to be considered.
Current Practice
The Town currently accepts donations and provides a tax-exempt letter to the donors. This is the same approach employed by Atherton for their Town Hall fundraising efforts. The template includes language to the effect of:
Dear Mr./Mrs.,
On behalf of the Town of Hillsborough, I would like to thank you for your generous charitable donation of $___, for the Town’s ____Project made on ___. This letter is to acknowledge and thank you for your generous tax-deductible donation of $____ in support of the _______.
A gift donation to a local government entity is tax deductible if it is solely for “public purposes." The IRS Code, at 26 U.S.C. §170(c)(1), defines "charitable contribution" (which is tax deductible) to include "a contribution or gift to or for the use of": A State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia.
Note that a local government – a city, county, or special purpose district – is considered to be a “political subdivision” of the state.
Thank you again for your support and considering Hillsborough for this very generous donation.
A check in the amount of $______ from:
NAME OF ENTITY
No goods and/ or services were provided in exchange for the donation. Acknowledged by the
TOWN OF HILLSBOROUGH
FEN:____________
-333-
Agenda Staff Report – Hillsborough City Council
August 10, 2026
Options
The discussion below includes a brief description on the three options including both receiving and distributing donor funds or in-kind services, as well as the pros and cons and proposed structure.
OPTION A: Forming a tax-exempt nonprofit foundation for accepting donations and distributing donor funds
Should the Town wish to consider the formal creation of an exempt organization, there are several options and steps involved. First, the organization must be organized as a California nonprofit public benefit organization. Second, the exempt organization must then apply for federal and state tax exemption. These steps involve several requirements which are explained in further detail below.
(1) Incorporation as Public Benefit Corporation
Organization Purpose - A public benefit corporation must be formed for public or charitable purposes and may not be organized for the private gain of any person. Therefore, a public benefit corporation could undertake purposes which parallel the services that may be provided by the Town.
Prior to the filing of the articles, several factors will need to be taken into consideration by the Town. Determining the scope of the purposes to be served by the corporation will assist the Town in making the decision of whether to form:
• a corporation that solely transfers funds to the Town for public purposes (i.e., a supporting organization)
• multiple nonprofit corporations (each one independent from the other with unique scope), or
• a single nonprofit corporation with various committees devoted to specific activities.
The more distinct an activity is from another, the more advisable it is to create separate entities in order to not only shield one entity from the missteps of another but to also secure the most favorable tax status for which certain activities may not qualify.
Filing Paperwork - There is significant paperwork involved in forming a public benefit corporation, including:
• Name for the corporation
• Articles of incorporation filed by the corporation’s incorporator (usually an attorney) – content of the articles is what determines whether the organization will be granted exemption under federal and state laws
• Organization bylaws to establish the rubric under which the corporation will be managed
Board of Directors - Another key consideration is the number and composition of the board of directors of the corporation.
-334-
Agenda Staff Report – Hillsborough City Council
August 10, 2026
The board of directors of a majority of corporations created by public agencies are comprised of public officials (e.g., in the case of a public agency, the corporation’s board members could be members of the public agency’s governing board). Under the Brown Act, if the City Council creates the nonprofit, it would be subject to the Brown Act. See, Cal.
Gov. Code 54952(c).
Whether the nonprofit board is comprised of public agency governing board members or directors appointed by the public agency, this composition allows the Town the greatest amount of control over the operation of the nonprofit. If, however, the Town wishes to completely divest itself of any responsibility for or oversight of the nonprofit, then the board of directors of the nonprofit could be made up of members of the community who are committed to the purposes to be served by the nonprofit. Should a nonprofit be established that is separate from the Town, that organization would be responsible for all filings and taxes, perform its own accounting and financial reporting, maintain a separate bank account, and set up its articles of incorporation. Whereas, if the nonprofit is Town-owned, there are some benefits as it relates to accounting and reporting. (2) Tax Exemption
After the corporation has been incorporated as a nonprofit corporation, the next step is to prepare and submit the application for federal and state tax exemption of the nonprofit. The Town’s exempt status as a governmental entity does not automatically transfer to the nonprofit even if the board of directors is made up of public officials. Therefore, the nonprofit must independently seek tax-exempt status. The federal exemption provisions are primarily found under Section 501(c) of the Internal Revenue Code which provides a number of categories under which a nonprofit can claim exemption. The 501(c)(3) designation is either for charitable organizations, including those that serve public purposes.
Once a nonprofit entity is granted exemption from federal income taxes, state exemption must be applied for separately but it is usually granted if an organization has already received federal exemption.
(3) Tax Filing and Reporting Obligations
Exempt organizations are responsible for tax filing and reporting requirements, as outlined below:
• Reports and Returns to Internal Revenue Service and Franchise Tax Board - Unless the gross receipts of an exempt organization are normally (using a four year average) less than a certain threshold, then it must file annual returns on long-form Form 990 with the IRS and Form 199 with the Franchise Tax Board. However, exempt organizations with gross receipts below the specified threshold will need to file short-form annual return in the form of an e-postcard. Failure to file on a timely basis could expose the exempt organization to substantial penalties, and eventually loss of exempt status after three consecutive years of failing to file the required returns. It is possible to seek exemption from the federal and state filing requirements -335-
Agenda Staff Report – Hillsborough City Council
August 10, 2026
if it can be established that the exempt organization is an instrumentality of the City.
In addition, at any time that the purposes of the exempt organization shift, the exempt organization is required to notify the IRS so that it may make a determination of whether the change affects the exempt status of the organization. • Reports to Secretary of State- Within 90 days after filing its articles of incorporation, a nonprofit corporation must file a Statement of Information with the Secretary of State containing (a) the names and addresses of its chief executive officer, secretary, and chief financial officer; (b) the street address of its principal California office, if any; and (c) a designation of an agent for service of process (and that person's address, if the agent is not a corporation). Thereafter, the Statement must be filed at least on a biennial basis. However, the Statement must be filed earlier if the officers, mailing address or agent for service for the corporation change before the biennial Statement is due. Failure to file the Statement as required could cause the nonprofit corporation to be suspended by the Secretary of State.
• Attorney General- An exempt organization which is organized as a public benefit corporation which holds assets for charitable purposes is required to register with the California Attorney General’s Registry of Charitable Trusts. Thereafter, the exempt organization must submit an annual registration renewal along with a copy of the exempt organization’s completed Form 990. An additional report, Form CT-TR-1, must be filed if the exempt organization files the e-postcard (i.e., Form 990-N) rather the full form.
Advantages
The main attraction of an exempt organization is its tax-favored status, which the Town already enjoys on the basis of various theories (e.g., intergovernmental immunity, Section 115 of the Internal Revenue Code, Section 170(c) of the Internal Revenue Code etc.). Therefore, the primary advantages to the Town of forming an exempt organization would be: (i) operational, (ii) the generation of goodwill from community members and others who are more likely to make contributions to an exempt organization than to a public agency, and (iii) greater flexibility on investments.
The advantages derived from the operational benefits of creating an exempt organization depend on the level of control that the Town wishes to maintain over the exempt organization. If the Town wishes to remain involved in the operation of the exempt organization, then the benefits are with respect to the centralization of the operations of the various activities that will be shifted into one separate entity so that the burden on Town staff will theoretically be lessened. If the Town is comfortable with the idea of establishing an exempt organization which is wholly independent from the Town (i.e., the Town would not have a role in the operation of the exempt organization, including the appointment of members of the board of directors), then the Town could also potentially shield itself from liability with respect to the activities wholly operated by the nonprofit.
Further, irrespective of the level of control maintained by the Town, the creation of an exempt organization will also permit the concentration of resources, both financial and human, on the activities sponsored by the exempt organization.
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Agenda Staff Report – Hillsborough City Council
August 10, 2026
The second advantage to the Town of forming an exempt organization is the ability of the exempt organization to generate additional funding or other resources for activities that are currently sponsored by the Town. For example, individuals may be more likely to make monetary and in-kind contributions to 501(c)(3) exempt organizations than they are to public agencies.
Additionally, irrespective of the basis of its exemption, an exempt organization can stimulate community involvement in its activities from committed volunteers and therefore free up Town resources.
A third advantage to the Town of forming an exempt organization is while contributions to the Town, though deductible pursuant Section 170(c)(1) of the Internal Revenue Code if made exclusively for public purposes, will be subject to the same limitations on investment options as are applicable to the Town’s funds, such limitations are not applicable to an exempt organization which has greater latitude on investment options.
Disadvantages
Any disadvantages are with respect to the requirements imposed by law of an exempt organization incorporated. Potential disadvantages of incorporation include:
• certain built-in costs of formation,
• the need to observe corporate formalities
• the burden imposed on directors by statutory standards of conduct • staff time for annual filings and management, including adherence to the Brown Act , depending on the organization of the Board of Directors • competition with other nonprofits in the community for fundraising OPTION B: Adopt a new City Council policy or expand Policy 419: Memorial and Donation Policy
Creating a new policy would establish a new uniform process that defines objectives and eligibility criteria for accepting and distributing funds. The new policy would prohibit certain conduct, such as misuse of donated funds, ensure coordinated compliance with applicable laws and regulations, promote operational efficiency, and/or reduce risk and liability. The City Council can also consider expanding existing City Council Policy No. 419, Memorial and Donation Policy (Attachment 1). This policy was created to enable a process for the permitting of monuments, benches, and trees in an equitable, objective, and consistent manner. The policy could be amended to include guidelines for accepting and distributing donor funds or offering in-kind services.
Creating a new policy or expanding Policy No. 419 does not require appointing a board of directors or seeking nonprofit status. It would expand the process that exists now, which is to seek City Council consideration and approval for donations as they become available.
Advantages
A new policy would allow the City Council to create a new process for accepting and distributing donor funds. Alternatively, since City Council Policy No. 419 already exists, the City Council could -337-
Agenda Staff Report – Hillsborough City Council
August 10, 2026
amend it to create a new section establishing guidelines for which donations could be made for a specific project.
Disadvantages
Should the City Council choose to create a new City Council policy; it would require administrative involvement on behalf of Staff to establish a process and define objectives for accepting donations.
Furthermore, it would need specific language identifying the donation as tax-deductible and how a donation or in-kind service can be awarded.
OPTION C: Developing donor guidelines
Creating donor guidelines would allow for recommendations, interpretations, administrative instructions, best practice guidance, or a framework in which to operate. Like procedures, guidelines may change depending on the organization’s needs. Guidelines are documents that seek to simplify a set of processes with regard to an established practice but would not be a formal City Council policy.
The guidelines would define processes, accountability measures, and transparency protocols. For example, as applications are submitted to donate toward a Town project or requests are made for the distribution of funds or in-kind services, Staff would review and consider the application.
Advantages
Guidelines are flexible and allow for adjustments based on organizational needs. Additionally, a guideline is a procedure that stipulates how a donation or distribution of funds or in-kind service should be administered. Guidelines do not require a board of directors but would be administered by a staff member, as designated by City Council.
Disadvantages
Establishing guidelines is less formal and is not a City Council policy but rather an Administrative Instruction. Therefore, the City Council would be deferring approval at the staff level or designee as appointed by the City Council.
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.
ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment.
ATTACHMENT(S):
1. Town Policy No. 419
2. Presentation
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Agenda Staff Report – Hillsborough City Council
August 10, 2026
PREPARED BY: Mandy Brown, Assistant City Manager
RECOMMENDATION: Review the options for the Town to accept and distribute donation funds and provide direction on which, if any, option to pursue:
• Option A: Authorize staff to form a nonprofit foundation • Option B: Create a new City Council policy or amend existing City Council Policy 419 • Option C: Develop donation guidelines
• Keep current practice of providing a letter to donors -339-
1 T OWN OF H ILLSBOROUGH
MEMORIAL AND D ONATION POLICY
POLICY 419 CREATED MAY 10, 2021
PURPOSE: This Memorial and Donation Policy establishes guidelines, standards, and procedures for the installation and care of donated outdoor improvements, either as a result of a cash or physical property donation. These donations may include, but are not limited to, park benches, trees, plaques, and other outdoor amenities. Acceptable donations are always dependent upon the specific needs of the Town of Hillsborough (“Town”), and an updated list of acceptable donation opportunities is maintained by the Public Works Department. The Town desires to encourage donations while at the same time preserving our Town character and all donations shall fully respect the priorities, purpose, and integrity of the Town. Donations shall contribute to the community experience and preserve the visual character and quiet atmosphere of the community.
Guidelines established by this policy will apply to all donations made after the effective date of this policy. Donations made prior to the adoption of this policy shall be subject to applicable sections of this policy. Standards established by this policy will apply to purchased equipment, installation techniques, donation acknowledgements, and longterm care of all donations made after the adoption of this policy.
DEFINITIONS
Acquisition or Purchase: The Town and the community have an interest in ensuring that donated elements purchased and installed be of high quality related to style, appearance, durability, and ease of maintenance.
Cost: The Town has an interest in ensuring that the donor covers the full cost of the purchase, installation, and maintenance during the expected life cycle of donated elements. The Town also has an interest in ensuring that on-going maintenance costs do not negatively impact the resources available for maintenance of other Town facilities. Consequently, the Town may assess, at the time of purchase, a charge sufficient to cover anticipated ongoing maintenance of donated elements.
Existing Donation: Existing donations are those donations received prior to the adoption of this policy.
Maintenance: Maintenance of the landscaping and facilities at donation sites is the responsibility of the Town. Donated elements become Town property. Donations made prior to the adoption of this policy are to be maintained by the Town during their useful life spans.
ATTACHMENT 1
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2 New Donation: New donations are those made after the adoption of this policy.
Plaque: Flat tablet of metal, stone, or other material which includes text which commemorate a person, event or historical information relative to the location, person, group, or event of significance.
Repair: Donated elements must be of high quality to ensure a long life, be resistant to the elements, wear and tear, and to acts of vandalism.
POLICY:
Scope
This policy applies to all Town-owned property, including open space, parks, and rightof-way land. This policy does not apply to buildings.
Application
The City Manager will manage all donations located on Town property, with the assistance of the Public Works Department.
Applications are available through the mail or in person at Town Hall located at 1600 Floribunda Avenue, Hillsborough, CA 94010. For a donation to be considered, the donor will complete the application form (see Attachment 1). Completed applications and payment will be made to Town Hall for review, processing, and acceptance by the City Manager.
Donation requests will be processed in the order received. The Town will review all donation requests. Upon receipt of a donation request application by the Town, the request will be added to Memorial and Donation Policy request waiting list in the order in which it was received.
Donations
The Town will accept donations to recognize or memorialize or recognize individuals, groups, or significant historical individuals or events provided that such individuals or events were related to the local community, and provided that all of provisions of the Memorial and Donation Policy are met.
The Town has the authority to approve or deny any donation based on the appropriateness of the donation to the Town, the relationship between the Town and person, group or event to be honored or memorialized, or for any other reason.
Donations commemorating commercial products, political parties, activist groups, or nonprofit corporations involved in lobbying at any level of government, for profit corporations, or memorials containing endorsements of products or services, or that otherwise may be construed to be advertising or commercial promotion, are prohibited. -341-
3 Only one donation shall be dedicated to any single person, family, group, or historical person or event within the Town, unless there is a compelling reason for additional dedications as shall be determined by the Town.
Benches
Park benches may be sited on Town-owned property in locations deemed appropriate by the City Manager. Items donated become Town property at the time of purchase.
The Town will provide the bench, which will be of a style appropriate to its site and which will meet the standards of the Town for design, durability and construction. Town benches are purchased from a vendor by the Town after receiving the fees associated with the donated bench program. The models of benches, and vendor specifications, can be changed anytime at the sole discretion of the Town.
Trees
The size and specie of a donated tree (or trees) shall be limited to those determined by the Town. Trees will only be accepted for areas that have active irrigation systems in place unless the cost for addition of such facility is included in the donation.
Tree planting occurs between October and March. Planting during the cooler, wetter months helps optimize the health of a new tree.
Trees will be dedicated for the natural life of the tree, if a tree dies or is otherwise removed within two years of the dedication, the tree will be replaced at no additional cost.
Monuments
Memorials and upright monuments resembling those typically found in cemeteries may not be installed at a Town facility. Exceptions to this policy are monuments installed by the Town commemorating the history and/or dedication of a facility.
Other Donations
There may be additional donations possible other than those expressly listed or contained within this policy. The Town may accept other donations subject to a review and approval by the City Council. The Town will bring any donation proposal to the City Council for review and approval.
Site
Donations will be installed within the Town in accordance with the Town’s General -342-
4 Plan or an approved list of suitable locations as developed by the town.
When a potential new donation site is proposed, Town staff will review the site based on the following criteria:
1. The requested site does not interfere with the general use of the location.
2. The requested site does not obstruct any walkway or activity
3. The requested location does not interfere with normal activities that take place at the location.
4. The requested donation must fit in with the aesthetics of the location.
Term
Attachment 2 contains a list of approved donations, estimated installation, cost estimated annual maintenance, cost, and projected lifespan.
The donation term will be in accordance with the project lifespan listed or the useful life of the donation, whichever comes first. At the end of the donation term, the donation will be removed to allow for other donations and/or for removal or replacement. The family may request to have the plaque returned to them by contacting:
Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, CA 94010
Replacement/Renovation/Relocation/Removal
The Town will not be responsible for the replacement or renovation of damaged or stolen donations. At any time, a donation may be relocated or removed by the Town at its sole discretion. The Town does not guarantee a specific location for the placement of a donation and the person donating the item as no rights to, or ownership of, either the donation or the specific location the donation is placed.
The Town is not responsible for vandalism or Acts of God. The applicant will have first right to have the donation replaced, at their cost.
Plaque Inscriptions
Inscriptions on the plaques shall be minimal (a maximum of 150 characters) and can only include up to two names per plaque. Inscriptions may not contain any pictures, religious, political, or other information, or languages/symbols that may be offensive to the general public.
EXAMPLE: In memory of Jane Doe or In memory of Jane Doe and John Doe EXAMPLE: In loving memory of Jane Doe or In loving memory of Jane Doe and John Doe
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5 Design specifications such as font type and size will be at the discretion of the Town.
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Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, CA 94010
(650) 375-7400
Town of Hillsborough
Memorial and Donation Application
Applicant Information
Name of Donor
Address of Donor
Home Phone
Work Phone
Fax
Email Address
Donation Information
Description of Donation
Location of Donation
Name for Memorial
Type of Donation
I have read and agreed to the terms of the Memorial and Donation Policy Requested by
Date
To be completed by Town Staff
Reviewed by
Date
ATTACHMENT 1
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Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, CA 94010
(650) 375-7400
Town of Hillsborough
Approved List of Donations
Memorial and Donation Fee Schedule
Approved List of Donations
Donation Type
Element
Installation
Cost ($)
Projected Annual
Maintenance Cost ($)
Projected Lifespan
(Years) Total Cost ($)
Park Bench * * 10 *
Plaque $1,600 1 $150 30 $6,100
Tree (Native
only) $350 2 $40 3 35 $1,750
Others (e.g.,
Picnic Table,
Drinking
Fountain, Bike
Rack, etc.)
* * * *
*Price and projected lifespan will be provided upon request, pending size and location. 1 Bronze 14”x18” Bronze plaque. 2
15-gallon, planted. 3
Prune every five years at cost of $200.
ATTACHMENT 2
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Discussion to Establish a Nonprofit or Other
Program to Accept/Distribute Donation Funds
August 2026
1 ATTACHMENT 2
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Background
At the 2026 Annual City Council Goal Setting, the City Council provided direction to explore the formation of a nonprofit to support funding for various projects, for example:
• Memorial Day Parade
• 40 Baywood
• Other Capital Projects
2 -348-
Current Practice
The Town currently accepts donations and provides a tax-exempt letter to the donors. This is the same approach employed by the Town of Atherton for their Town Hall fundraising efforts. (Sample letter provided in staff report) 3 -349-
Options for Consideration
4 Option A:
Form Tax-Exempt Nonprofit
Option B:
Adopt a new City Council
Policy or Expand Policy 419
Option C:
Develop Donor Guidelines
Greater Level of Resources Required Smaller
Staff Time/Funding
Level of Control
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Option A: Form Tax-Exempt Nonprofit
5 Process:
(1) Organize as a California nonprofit public benefit organization • Organization Purpose – Determine scope and purposes to be served to determine whether to form: a corporation that solely transfers funds to the Town for public purposes (i.e., a supporting organization), multiple nonprofits (each one independent from the other), or a single nonprofit with various committees devoted to specific activities.
o The more distinct an activity is from another, the more advisable it is to create separate entities in order to not only shield one entity from the missteps of another but to also secure the most favorable tax status for which certain activities may not qualify. For example, a separate entity for the Parade versus 40 Baywood.
• Filing Paperwork – name of the corporation, articles of incorporation, and organization bylaws • Board of Directors – composition of the board of directors, whether members of the agency’s governing board serve on the board, appoint members, or are completely separate. Depending on the option selected, it will inform both the amount of control and transparency requirements (e.g., Brown Act requirements).
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Option A: Form Tax-Exempt Nonprofit
6 Process:
(2) Tax Exemption
• Prepare and submit application for federal and state tax exemption (3) Tax Filing and Reporting Obligations
• Annual tax filing and reporting requirements:
o Reports and returns to Internal Revenue Services and Franchise Tax Board o Reports to Secretary of State
o Registration with California Attorney General’s Registry of Charitable Trusts -352-
Option A: Form Tax-Exempt Nonprofit
Advantages (+)
• operational (if separate entity)
• generation of goodwill from
community members more likely to
make donations to an exempt
organization than to a public agency
• greater flexibility on investments
Disadvantages (-)
• certain built-in costs of formation,
• the need to observe corporate
formalities
• the burden imposed on directors by
statutory standards of conduct
• staff time for annual filings and
management, including adherence
to Brown Act meetings, depending
on the organization of the Board of
Directors
• competition with other nonprofits in
the community for fundraising
7 -353-
Option A: Tax-Exempt Nonprofit
Third Party
Example – Atherton Now
8 Atherton Now
• Third-party non-profit
• Formed to fundraise for Civic
Center project
Year Contributions
2015 $2 million
2016 $1.5 million
2018 $12,000
2019 $1 million
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Option A: Tax-Exempt Nonprofit
Third Party
Example – Friends of the Palo Alto Parks
9 Year Contributions
2018 $8,628
2019 $30,729
2020 Not available
2021 $41,423
2022 $94,399
2023 $25,796
• Third-party non-profit,
fundraising for City projects
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Option B: Adopt a new City Council
Policy or Expand Policy 419
10 Process:
Creating a new policy would establish a new uniform process that defines objectives and eligibility criteria for accepting and distributing funds. The new policy would prohibit certain conduct, such as misuse of donated funds, ensure coordinated compliance with applicable laws and regulations, promote operational efficiency, and/or reduce risk and liability. The City Council can also consider expanding existing City Council Policy No. 419, Memorial and Donation Policy (Attachment 1). This policy was created to enable a process for the permitting of monuments, benches, and trees in an equitable, objective, and consistent manner. The policy could be amended to include guidelines for accepting and distributing donor funds or offering in-kind services.
Creating a new policy or expanding Policy No. 419 does not require appointing a board of directors or seeking nonprofit status. It would expand the process that exists now, which is to seek City Council consideration and approval for donations as they become available.
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Option B: Adopt a new City Council
Policy or Expand Policy 419
Advantages (+)
• Establish guidelines for which
donations could be made for a
specific project
Disadvantages (-)
• May require creation of a new
policy
• Does not address concern that
individuals are more likely to
donate to a nonprofit entity
11 -357-
Option C: Develop donor guidelines
12 Process:
Creating donor guidelines would allow for recommendations, interpretations, administrative instructions, best practice guidance, or a framework in which to operate. Like procedures, guidelines may change depending on the organization’s needs. Guidelines are documents that seek to simplify a set of processes with regard to an established practice but would not be a formal City Council policy.
The guidelines would define processes, accountability measures, and transparency protocols. For example, as applications are submitted to donate toward a Town project or requests are made for the distribution of funds or in-kind services, Staff would review and consider the application. Based on the City Councils’ decision, -358-
Option C: Develop donor guidelines
Advantages (+)
• Flexible – allows for adjustment
• Establishes procedure that
stipulates how a donation or
donation of funds should be
administered
• Could be administered by staff
Disadvantages (-)
• Less control – deferred to staff
approval
• Does not address concern that
individuals may be more likely to
donate to a nonprofit entity
13 -359-
Summary/Discussion
14 Greater Smaller Level of Resources Required
Staff Time/Funding
Option A:
Form Tax-Exempt Nonprofit
Advantages (+) Disadvantages (-)
• Operational
(if separate
entity)
• more likely to
make
donations to
an exempt
organization
• Greater
flexibility on
investments
• certain built-in
costs of
formation
• statutory
standards of
conduct
• staff time for
annual filings and
management
• competition with
other nonprofits
Option B:
Adopt a new City Council Policy or
Expand Policy 419
Advantages (+) Disadvantages (-)
• Establish
guidelines for
which donations
could be made
for a specific
project
• May require
creation of a
new policy
• Does not
address
concern that
individuals are
more likely to
donate to a
nonprofit
Option C:
Develop Donor Guidelines
Advantages (+) Disadvantages (-)
• Flexible
• Establishes
procedure for
use of
donations
• Could be
administered
by staff
• Less control –
deferred to
staff approval
• Does not
address
concern that
individuals
may be more
likely to
donate to a
nonprofit
Level of Control
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