Item No. 2. Page 1 of 1
City Council
Supplemental Report
From: Ed Shikada, City Manager
Meeting Date: October 28, 2024
Item Number: 2
Report #:2410-3671
TI
TLE
Nonprofit Relationships Study Session - Supplemental Report R
ECOMMENDATION
Council to receive a report and provide feedback on a framework for strengthening the City’s practices in nonprofit relationship engagement, funding, support, and evaluation, informed by the 2022 Nonprofit Audit insights and recommendations.
B
ACKGROUND
Staff inadvertently included an incorrect link for the Public/Private Partnerships policy in the published staff report. The functional link is
https://www.cityofpaloalto.org/files/assets/public/v/1/city-manager/misc/la/1-25-mgr-public- private-partnerships-8-07.pdf.
A
PPROVED BY:
Ed Shikada, City Manager
POLICY AND PROCEDURES 1-25/MGR
REVISED: AUGUST 2007
1 PUBLIC/PRIVATE PARTNERSHIPS
POLICY STATEMENT
The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. For th e purposes of this policy, “pub lic/private” also encompasses “public/nonprofit” partnerships.
Definitions
Public/private partnership: A public/private partnership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. Such partnerships may take various forms, including:
• Acceptance of or solicitation of service or facility proposals • Facilitation of such proposals through the City's regulatory process • Waiver of City General Fund fees to help reduce project costs. • Contributions of City matching funds for c onstruction of facilities to be owned and controlled or operated by the City.
• Provision of facilities to the private partner at no charge or at a subsidized rent.
Public/private partnerships typically fall into one of three categories: co-sponsorship, alliances or joint ventures.
Co-Sponsorships: This is the most common type of public/private partnership. An organization furthers the mission of the City by supporting a City activity or program in conjunction with pursuit of th at organization’s own mission or program. Co-sponsorships can take the form of one-time events or annual ag reements. Some examples of co-sponsorships include the Palo Alto Tennis Cl ub use of City courts to provi de a youth tennis program and American Youth Soccer Or ganization’s use of space in a City facility to train referees. Co- sponsorships are entered into by staff and normally have no or minimal financial impact.
Alliances: This type of public/private partnership involves organizations that have been created for the sole purpose of supporting a City program or an array of City programs. The organization does not expect to receive any direct financ ial benefit or to alter City policy and/or operations, but undertakes to work closely and coopera tively with staff to implement City goals. Alliance organizations include the Recreation Foundation, the Art Center Foundation (Project Look or Cultural Kaleidoscope), the Friends of the Children’s Theatre (the Magic Castle), the Library Found ation and the Friends of the Palo Alto Library (financial assistance with the renovation and expansion of the Children’s Library). Alliances are approved by the Council if there are any staffing or budgetary implications to the partnership.
POLICY AND PROCEDURES 1-25/MGR
REVISED: AUGUST 2007
2 Joint Ventures: This type of partnership involves or ganizations which have programs or missions independent of the City and involve the City entering into a contractual relationship with the public or nonpro fit organization with bo th parties contributing to the partnership for their mutual benefit. Each jo int venture is uniquely negotiate d by the staff and approved by the City Council. Examples of Joint Ventures include Theatr eWorks, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by older adult service provider, Avenidas.
PROCEDURES
Initiation of partnerships: Public/private partnerships may be initiated in one of three ways:
• By staff: Staff identifies an opportunity for such a partnership and undertakes an informal or formal request for proposal process to identify partners. • By Council: The City Council directs st aff to work with a private or nonprofit organization to develop such a partnership.
• By a private or nonprofit organization: An organization makes a partnership proposal to the staff or City.
City Manager Review: If the partnership proposal involves more than one City department, the City Manager’s Office will ap point a team with re presentatives of all City departments who are stakeholders in the partnership proposal. The team will analyze the proposal and inform the City Manager of the resource implications of the proposal, including staffing and monetary commitments. This would include proposed fee waivers. If the proposal will require a re -ordering of department priorities that have already been appr oved by the Council in setting its an nual priorities or in the budget process, Council approval will be required pr ior to commitment to the partnership.
Council approval will also be required if th e partnership requires a new or adjusted allocation of operating or capital funding. Note: Co-sponsorships usually only involve a single department and do not necessitate the formation of an interdepartmental committee, the involvemen t of the City Manager’s Office or the approval of the City Council.
City-Initiated Partnerships: Such partnerships will be guided by existing policies and procedures governing purchasing and outsourcing, using “re quests for proposals” and/or bid processes as the method of initiating a pa rtnership. A City-in itiated partnership may incorporate incentives including naming rights, waiver of non-enterprise fund building and planning fees, reduced lease rates, free us e of space, subsidies, and staff resources.
All incentives may be negotiated on a case-by-case basis.
POLICY AND PROCEDURES 1-25/MGR
REVISED: AUGUST 2007
3 Evaluation of Viability of Partnering Organization: Staff will provide the City Manager and/or City Council with its assessment of the viability of the proposed partnership, based on the partnering organizati on’s possession of sound organi zational, administrative and fiscal management, and its demo nstrated experience to achiev e and sustain project tasks, such as fundraising and building community support. For proposed facility improvement or expansion initiatives, the nonprofit or priv ate organization should have the ability and commitment to make a substantial pledge to the project’s cost.
Facilities Proposals:
• If a City facility is to be renovated, expa nded or otherwise be directly affected by the partnership, the Infrastructure Manage ment Plan will have to be adjusted appropriately.
• Long-term staffing, operational and mainte nance costs must be identified in the proposal. The project’s applicable costs a nd funding sources for furnishings, fixtures and equipment will be identified.
• The parties will negotiate the joint or separate financial responsibility for any project cost overruns on a project-by-project basis.
• Staff may recommend that any standard Ci ty processing or use fee authorized under the Municipal Fee Schedule, excluding fees and charges levied by City of Palo Alto Utilities or other City enterprise fund programs, should be waived as a condition of the City's participation. Waiver of fees may be granted by the Council and limited to those fees associated with a construction or capital improvement project which, upon its completion, resu lts in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only a portion of a construction or capital improvement project will result in a new or improved City facility, building or park, or portion thereof, th en the Council may waive only that portion of any associated fee directly relating to the construction, improvement or enhancement of the City facility, building or park. As appropriate, the summary and recommendation in the report to the Coun cil will include a staff recommendation on waiving fees which the Council can approve or reject. • The City will determine whether the nonprofit or private organization shall use or may forego a formal or informal competitive selection process in the hiring of professionals who will perform the management, design and/or construction phases of the project. The City shall review and approve the requirements for and the performance of all phases of design, planning and construction work for the project.