Loading...
HomeMy WebLinkAbout25D - AGMT - BID ASSESSMENT FUNDSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 16, 2013 TITLE: AGREEMENT WITH DOWNTOWN INC. AND SANTA ANA BUSINESS COUNCIL FOR 2013 BID ASSESSMENT FUNDS PROGRAMMING f CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1" Reading ? Ordinance on 2nd 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 Operating Agreements (Exhibits 1 and 2) with Downtown Inc. and the Santa Ana Business Council Inc., respectively for the programming and distribution of the Downtown Santa Ana Business Improvement District (BID) assessment funds for 2013. DISCUSSION At its meeting of July 1, 2013, the City Council conducted a public hearing to consider all protests regarding the intention to levy a 2013 assessment for the Downtown Santa Ana Business Improvement District. Since a majority protest was not received, the City Council adopted a resolution confirming the 2013 Santa Ana Downtown BID Assessment Report and levied the assessment for 2013. In a Settlement and Release Agreement with Downtown Inc., it was agreed upon that should the BID be reactivated, Downtown Inc. would receive 50% of the BID revenues and the remaining 50 percent would be distributed to Santa Ana Business Council Inc. for the promotion and marketing of the Downtown area. To administer these activities, the City will need to execute an Operating Agreement ("Agreement") with each business association. The Agreements contain provisions to ensure proper administration and distribution of the funds. Provisions are included for items such as the annual budget, financial record keeping, fund distribution, and board composition and meeting requirements. One of the requirements of the Agreement is that both organizations must conduct their meetings in accordance with the Ralph M. Brown Act. To comply with this legal provision, City staff will be providing the necessary training to both Downtown Inc. and Santa Ana Business Council Inc.'s Board of Directors. According to the budgets summary in the 2013 BID Assessment Report (Exhibit 3), a majority of the BID funds will be spent on marketing and promotions of the downtown area through special events and advertising. Given that this is the first year of the BID and both organizations have already begun incurring expenses for budgeted events, the Agreement provides for $20,000 in 2501-1 BID Operating Agreements September 16, 2013 Page 2 upfront funding to each organization for this first year only, subject to subsequent receipt of verifiable invoices/receipts. In previous years, the operating fund of the BID had a prior year carry forward amount that could be utilized. Upon receipt of city-approved invoices for all other expenses, the City will reimburse the two organizations per the terms of the Agreement. City staff will work closely with each organization to establish a process to ensure that timely and accurate receipts will be submitted for reimbursement. The terms of these Operating Agreements commence on September 17, 2013 and terminate on September 17, 2016, unless terminated sooner due to any violations of the provisions in the Agreement, or if the BID is not approved in any given year. The Agreements will be renewed automatically in one year renewal terms, unless either party gives at least two months' notice of termination. It is still anticipated that both organizations' budgets will be approved by the Community Redevelopment and Housing Commission and then by City Council for the subsequent levy of assessments in 2014 and 2015. FISCAL IMPACT There is no direct fiscal impact to the City associated with this action as Business Improvement Area revenues are transferred to the District accounts for use in accordance with its budget. J*q?;) - Nancy Fon , A Interim Executive Director Community Development Agency I Francisco Gutierrez Wo Executive Director Finance & Management Services Agency NF/MM/kg Exhibits 1. Operating Agreement with DTI 2. Operating Agreement with Santa Ana Business Council Inc. 3. Budgets Summary of 2013 BID Assessment Report 25D-2 XHIBIT 1 OPERATING AGREEMENT This AGREEMENT made and entered into this 17`h day of September, 2013, 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. Whereas the City Council of the CITY previously established a community management district (hereinafter the "CMD") designated as the "Downtown Community Management District" (hereinafter the "DISTRICT"); and B. Whereas assessments were supposed to be levied annually against the assessable parcels in the DISTRICT commencing with Fiscal Year 2009-2010 and continuing through Fiscal Year 2013-2014; and C. Whereas the CITY was to use the assessments to contract for the administration of a program of improvements and activities in connection with the DISTRICT for Fiscal Years 2009-2010 through 2013-2014; and D. Whereas due to various reasons the City Council on February 4, 2012 repealed the entirety of the CMD and did not levy the DISTRICT assessment to fund the CMD services for calendar year 2013; and E. Whereas with the repeal of the CMD, several downtown merchants and property owners have expressed an interest in reactivating the Downtown Santa Ana Business Improvement Area (BID) so that they could continue to receive funding to promote the safety, maintenance, and overall economic stability of the downtown area; and F. Whereas the City Council agreed that if there was sufficient support by those businesses that would be impacted by assessments, that it would reactivate the prior Downtown Business Improvement Area which was established on February 6, 1984 pursuant to Ordinance NS-1715 (attached hereto and incorporated herein as Exhibit A) ; and G. Whereas the City Council further agreed in a Settlement and Release Agreement with DTI that, should the BID be reactivated, DTI would receive 50% of the BID revenues in any given calendar year and remaining 50% would be distributed to a new merchants' nonprofit group serving independently of DTI, subject to an operating agreement for each group; and H. Whereas the Santa Ana Business Council has emerged as the new merchants' nonprofit group that has expressed an interest in obtaining the other 50% of BID funds to be spent in 1 25D-3 urtherance of the overall economic stability of the downtown area consistent with the requirements of NS-1715; and 1. Whereas the City Council has "reactivated" the BID by its approval of an assessment report for calendar year 2013 outlining the proposed budget and activities to be conducted in the downtown area; and J. Whereas a public hearing was held, and there being no majority protest against the approval of the assessment report and levy of the assessment; and K. Whereas the City and DTI under this Operating Agreement propose 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]. WHEREFORE, and in consideration of their mutual and respective covenants and promises hereinafter set forth, and subject to the terms and conditions of this Agreement, the parties hereto do hereby agree as follows: ARTICLE 1 PRELIMINARY MATTERS § 1.01 Definitions As used in this Agreement, the following terns shall have the following meanings: (a) "City" means the City of Santa Ana, California. (b) "City Council" means the City Council of the City. (c) "City Manager" means the City Manager of the City or his/her designated representative. (d) "DTP" means Downtown Incorporated, Inc., a California nonprofit corporation. (e) "Board" means the Board of DTI. (f) "Tenn" means three (3) years commencing on September 17, 2013 and terminating on September 16, 2016 unless terminated sooner due to any violations of the provisions of this Agreement or if a BID assessment is not approved in compliance with the Parking and Business Improvement Area Law of 1989 [Streets and Highways Code Sections 36500, et seq.]. The Term of this 2 25D-4 greement shall be automatically renewed in one (1) year Renewal Terms unless either party gives notice of termination at least two (2) months prior to the expiration of the Initial Term or any Renewal Term. § 1.02 Status of DTI (a) By its execution of this Agreement, DTI warrants that it is duly incorporated under the laws of the State of California and that true and correct copies of its Articles of Incorporation and Bylaws and a true and correct listing of DTI's officers and their terms of office, certified as such by DTI's Secretary, have been filed with the Clerk of the Council. (b) By its execution of this Agreement, City accepts and agrees to the organization of the DTI as set forth in the above said Articles of Incorporation and Bylaws. § 1.03 Compensation of DTI Board Members and Meetings (a) Meetings shall be held on a quarterly basis with more meetings called at the discretion of the DTI Board. When conducting meetings related to the Downtown Santa Ana Business Improvement Area members of the Board shall serve without compensation other than reimbursement for expenses incurred by them in the course of the performance of services for DTI when authorized by the DTI Board. (b) DTI shall conduct its meetings in accordance with the Ralph M. Brown Act; the number of board members for purposes of the Brown Act shall consist of _ board members, with board members serving as a quorum. § 1.04 Changes in Officers, Articles and Bylaws DTI shall notify the Clerk of the Council of any change in the membership of the Board and any change in the officers of DTI. Any amendment of DTI's Articles or Bylaws shall be filed with the Clerk of the Council. §1.05 City Representation at Meetings of DTI The City Manager shall be entitled to attend all meetings of DTI related to the BID and to participate in the discussions of the Board to the same extent as the members of the Board, and DTI shall assure that the City Manager is provided with reasonable advance notice of all meetings of DTI. Nothing herein shall be construed to provide the City Manager with any authority to make, second, or vote on motions, or to cause him to be counted for purposes of determining whether a quorum exists at meetings of DTI. 25D-5 1.06 City Residents/Business Operators on the Board A majority of the Board shall be City residents or business operators. If the number of members who are City residents or business operators becomes less than a majority due to the death, resignation, or change of residence or business location, DTI shall not be in default under this section, provided, however, that the next member appointed to the Board shall be a City resident or business operator. ARTICLE 2 REPORTS AND RECORDS AND BID FUND TRANSFERS § 2.01 Annual Budget and ProLTram Report (a) No later than November First (I") of each year, DTI shall provide the City Manager with a copy of a detailed calendar year operating budget showing expected sources of revenue and the nature of all expected or proposed expenditures for the forthcoming calendar year and a report on the proposed programs to be undertaken by DTI in said calendar year. (b) The proposed budget shall be submitted to the City Council for approval subject to the procedures provided for in California Streets and Highway Code Section 36530 et seq. If the proposed budget is accepted by the City Manager, it shall be submitted to the City Council for approval, in whole or in part. If the proposed budget is rejected by the City Manager, the City Manager and DTI shall meet in good faith in an attempt to reach agreement on a budget. If they are unable to do so, the City Manager shall submit the DTI's proposed budget to the City Council for approval, in whole or in part. (c) DTI acknowledges that its proposed budget in any given calendar year will consist of 50% of all BID assessments collected from businesses subject to the Downtown Santa Ana Business Improvement Area as reflected in Ordinance NS-1715. (d) DTI further acknowledges that the use of all BID proceeds will be subject to the BID laws as currently exist and/or as may be modified in the future; and that expenditures of BID funds will be for the purposes identified in Ordinance NS-1715. (e) The City shall establish and maintain in its accounting system a trust fund account for the deposit of BID assessment monies collected together with a specific account activity code which shall reflect the deposit and expenditure reimbursement of BID assessment monies apportioned for use by DTI pursuant to subsection (c) above. (f) DTI shall have the option for the first year of this Agreement to request an advance of up to twenty thousand dollars ($20,000.00) from the City upon presentment of documentation indicating anticipated expenses in furtherance of the purposes identified in Ordinance NS-1715. 4 25D-6 uch written documentation shall be approved by the Executive Director of Community Development Agency or his or her designee. Any such advance shall be deducted from BID assessment monies collected and deposited. DTI agrees that such advance shall only apply to the first the $20,000.00 of available funds and before any subsequent reimbursements can be made, DTI shall sufficiently document such advance by accompanying receipts, purchase invoices, or other permanent evidences of expenditure as may be prudently required by the City in accordance with Generally Accepted Accounting Principles and established City accounting procedures. (g) The City shall make all reasonable good-faith efforts to deposit BID assessment monies collected each month by the 15`" day of the month following; provided that where the 15'h day falls on a weekend, holiday, or other day in which City Hall is closed, then said deposit shall be made the next day City Hall is open. (h) The City shall also deposit monthly an interest payment equivalent to the average amount of the daily balances for the period of the preceding month. (i) The City upon depositing BID assessment monies shall notify DTI by electronic mail of the net amount of monies available for reimbursement to DTI. Failure by DTI to receive or acknowledge electronic mail notification shall not constitute a breach of this Agreement. 0) The City upon receipt of a written request for reimbursement submitted by DTI for documented expenses, shall inspect and examine each request to ensure that all expenses submitted for reimbursement are for the purposes identified in Ordinance NS-1715 and that all expenses submitted are sufficiently documented by accompanying receipts, purchase invoices, or other permanent evidences of expenditure as may be prudently required by the City in accordance with Generally Accepted Accounting Principles and established City accounting procedures. Reimbursement requests shall be approved by the Executive Director of the Community Development Agency or his or her designee. (k) The amount of any approved reimbursement made by the City shall not exceed the net funds available for such reimbursement. In the event that a reimbursement request submitted by DTI exceeds the balance of available funds, the City shall prorate the reimbursement accordingly. (1) The City shall make all reasonable good-faith efforts to process reimbursement requests within 15 working days and to issue a reimbursement check for the approved amount or make equivalent electronic payment to DTI. (m) In the event questions arise relating to the balance of funds available to DTI, DTI may within 15 days of notification request an accounting by the City of the amount of net funds available for reimbursement to DTI. (n) In the event questions arise relating to the amount of any specific reimbursement to DT1 approved by the City, DTI may, within 15 days of such reimbursement payment, request that 5 25D-7 he City re-evaluate the amount of such reimbursement. Thereupon the City shall re-evaluate the amount of such reimbursement and give written notification of its decision to DTI which shall be final and conclusive. § 2.02 Annual Financial Statement and Audit Within sixty (60) days following notice by the City, DTI shall submit to the City Manager a complete statement of DTI's revenues and expenditures and a financial audit for the preceding calendar year prepared by an independent certified public accountant. § 2.03 Financial Records DTI shall keep, or cause to be kept, true, accurate and complete records, including double- entry books, a profit and loss statement, and a balance sheet, such that if possible at all times to determine the amount and nature of all revenues and expenditures. All expenditures and transactions shall be supported by documents of original entry such as sales slips, cash register tapes, and purchase invoice and receipts. All such account books, statements, balance sheets and supporting documents shall be retained by DTI for a period of three (3) years after the end of the accounting year to which they pertain. § 2.04 Accounting Procedures DTI shall maintain a system of accounting according to Generally Accepted Accounting Practices. § 2.05 Inspection and Audit City shall be entitled, during the term of this Agreement and for a period of one year following the termination, to: (a) inspect and examine all of DTI's books, statements, records, and supporting documents to ascertain the correctness of DTI's financial statements. Any such inspection and/or examination shall be conducted during normal business hours with prior 15 days written notice to DTI; and (b) inspect and examine each request for reimbursement received from DTI to ascertain that all expenses submitted for reimbursement are for the purposes identified in Ordinance NS-1715 and that all expenses submitted are sufficiently documented by receipts, purchase invoices, or other permanent evidences of expenditure in accordance with Generally Accepted Accounting Principles and established City accounting procedures. Any such inspection and/or examination shall be conducted during normal business hours with prior 15 days written notice to DTI. 6 25D-8 RTICLE 3 INDEMNITY AND INSURANCE § 3.01 Indemnification DTI shall indemnify and save harmless City and its officers, agents and employees from and against any and all claims, demands, loss or liability of any kind or nature which City or its officers, agents, or employees may sustain or incur, or which may be imposed upon them, or any of them, as a result of, arising out of, or in any manner connected with DTI's management and/or administration of the BID funds. § 3.02 Insurance Requirement Generally Prior to the Commencement Date (except as hereinafter otherwise provided), DTI shall obtain at its sole cost and file with the Clerk of the Council, and maintain throughout the Term, policies of insurance as required by this section and sections 3.03 through 3.05, or a certificate of such insurance, satisfactory in form to the City Attorney. Each such policy (except policies of Workers' Compensation Insurance) shall name City as an insured or additional insured and each liability insurance policy shall also name the officers, agents and employees of City as insureds or additional insureds. Each such policy shall also contain a provision that no termination, cancellation or change of coverage or (where applicable) of insured or additional insured shall be effective until after thirty (30) days notice thereof has been given in writing to City. § 3.03 Liability Insurance DTI shall provide a policy or policies of insurance which provides coverage not less than that provided in the form of a comprehensive general liability insurance policy against liability for any and all claims and suits for damages or injuries to persons or property resulting from or arising out of the operations of DTI, its officers, employees, agents or assigns. Said policy or policies of insurance shall provide coverage for both bodily injury and property damage in not less than One Million Dollars ($1,000,000.00) combined single limit, or its equivalent. § 3.04 Fidelity Bonding DTI shall provide a policy or policies of insurance insuring DTI against loss due to dishonesty of DTI's officers, agents and employees. Said policy or policies shall provide coverage in not less than $1,000,000. § 3.05 Workers' Compensation Insurance DTI shall provide a policy or policies of workers' compensation insurance as required by law. 7 25D-9 3.06 Modification of Insurance Requirements The City Manager may modify or suspend the requirements imposed on DTI by this Article if in his reasonable determination; strict compliance is impossible or excessively costly due to insurance market conditions. ARTICLE 4 DEFAULTS, REMEDIES AND TERMINATION § 4.01 Defaults (a) Failure or delay by either party to perform any tern or provision of this Agreement shall constitute a default under this Agreement. The injured party shall not initiate the remedies hereinafter provided until the defaulting party has been given written notice of the default, specifying the nature thereof, and a period of sixty (60) days to cure or correct such default. (b) Any failure or delay by either party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. § 4.02 Remedies of City In the event of any default and failure to cure, correct or remedy the same by DTI, City may, at City's sole discretion, in addition to or in lieu of any other remedies, exercise either of the following remedies: (a) Delay of any or all transfers of BID funds to DTI collected pursuant to § 2.01 of this Agreement until such default is cured, corrected or remedied; provided such delay is approved by the City Council. (b) Terminate this Agreement, provided such termination is approved by the City Council. § 4.03 Legal Actions In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal action must be instituted in the Superior Court of the County of Orange, State of California, or in any other appropriate court in that county. 8 25D-10 4.04 Cumulative Rights and Remedies The rights and remedies of the parties are cumulative and the exercise by either party of one or more such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. § 4.05 Termination Upon the expiration of the Term or upon the earlier termination of this Agreement as provided in Section 1.01(f) or Section 4.02 the City shall have no further obligation to provide funding or other assistance to DTI pursuant to this Agreement for any period following such expiration or early termination. ARTICLE 5 GENERAL PROVISIONS § 5.01 Representatives (a) All actions authorized to be taken by City pursuant to this Agreement, without specification in this Agreement as to the body or office so authorized, shall be deemed exercisable on behalf of City by the City Manager, unless otherwise stated. The City Manager may designate any officer of the City as his or her representative with respect to any specified authority given to the City Manager by this Agreement, and in such event the actions of such officer within the scope of such authority shall have the same effect as if taken by the City Manager. (b) All actions authorized to be taken by DTI pursuant to this Agreement, without specification in this Agreement as to the body or office so authorized, shall be deemed exercisable on behalf of DTI by DTI's governing board or by such officer of DTI as may be designated by resolution of said governing board. § 5.02 Notices Notices and written communications sent by one parry to the other shall be either personally delivered or sent by U.S. Mail, postage prepaid, to the following addresses: (a) If sent by DTI to City: Clerk of the Council City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 9 25D-11 ith Copies to: City Manager City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 And: City Attorney City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 (b) If sent by City to DTI: Downtown Inc. 200 North Main St. 2"d Floor Santa Ana, CA 92701 Attention: Chairman of the Board § 5.03 Non-assi ng ability The rights and obligations of DTI under this Agreement may not be assigned or delegated without the prior approval of the City Council. § 5.04 Partial Invalidity If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect, and shall in no way be affected, impaired or invalidated thereby. §5.05 Exclusivity Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement or amendment hereto shall be effective unless executed in writing and signed by both City and DTI. 10 25D-12 5.06 Conflict of Interest Clause SABC covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance under this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. ATTEST: Maria D. Huizar Clerk of the Council CITY OF SANTA ANA: Kevin O'Rourke Interim City Manager APPROVED AS TO FORM: Jose Sandoval Chief Assistant City Attorney Downtown Inc.: By: Title: 11 25D-13 5D-14 XHIBIT 2 OPERATING AGREEMENT This AGREEMENT made and entered into this 17`x' day of September, 2013, 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. Whereas the City Council of the CITY previously established a community management district (hereinafter the "CMD") designated as the "Downtown Community Management District" (hereinafter the "DISTRICT"); and B. Whereas assessments were supposed to be levied annually against the assessable parcels in the DISTRICT commencing with Fiscal Year 2009-2010 and continuing through Fiscal Year 2013-2014; and C. Whereas the CITY was to use the assessments to contract for the administration of a program of improvements and activities in connection with the DISTRICT for Fiscal Years 2009-2010 through 2013-2014; and D. Whereas due to various reasons the City Council on February 4, 2012 repealed the entirety of the CMD and did not levy the DISTRICT assessment to fund the CMD services for calendar year 2013; and E. Whereas with the repeal of the CMD, several downtown merchants and property owners have expressed an interest in reactivating the Downtown Santa Ana Business Improvement Area (BID) so that they could continue to receive funding to promote the safety, maintenance, and overall economic stability of the downtown area; and F. Whereas the City Council agreed that if there was sufficient support by those businesses that would be impacted by assessments, that it would reactivate the prior Downtown Business Improvement Area which was established on February 6, 1984 pursuant to Ordinance NS-1715 (attached hereto and incorporated herein as Exhibit A) ; and G. Whereas the City Council further agreed in a Settlement and Release Agreement with Downtown Inc. ("DTP'), that, should the BID be reactivated, DTI would receive 50% of the BID revenues in any given calendar year and remaining 50% would be distributed to a new merchants' nonprofit group serving independently of DTI, subject to an operating agreement for each group; and 1 25D-15 . Whereas the Santa Ana Business Council has emerged as the new merchants' nonprofit group that has expressed an interest in obtaining the other 50% of BID funds to be spent in furtherance of the overall economic stability of the downtown area consistent with the requirements of NS-1715; and 1. Whereas the City Council has "reactivated" the BID by its approval of an assessment report for calendar year 2013 outlining the proposed budget and activities to be conducted in the downtown area; and J. Whereas a public hearing was held, and there being no majority protest against the approval of the assessment report and levy of the assessment; and K. Whereas the City and SABC under this Operating Agreement propose 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 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 SABC BID Funds, and (4) ensure that SABC meetings are compliant with the Ralph M. Brown Act [Government Code Sections 54950, et seq]. WHEREFORE, and in consideration of their mutual and respective covenants and promises hereinafter set forth, and subject to the terms and conditions of this Agreement, the parties hereto do hereby agree as follows: ARTICLE 1 PRELIMINARY MATTERS § 1.01 Definitions As used in this Agreement, the following terms shall have the following meanings: (a) "City" means the City of Santa Ana, California. (b) "City Council" means the City Council of the City. (c) "City Manager" means the City Manager of the City or his/her designated representative. (d) "SABC" means Santa Ana Business Council, Inc., a California nonprofit corporation. (e) "Board" means the Board of SABC. (f) "Term" means three (3) years commencing on September 17, 2013 and 2 25D-16 erminating on September 16, 2016 unless terminated sooner due to any violations of the provisions of this Agreement or if a BID assessment is not approved in compliance with the Parking and Business Improvement Area Law of 1989 [Streets and Highways Code Sections 36500, et seq.]. The Term of this Agreement shall be automatically renewed in one (1) year Renewal Terms unless either party gives notice of termination at least two (2) months prior to the expiration of the Initial Term or any Renewal Term. § 1.02 Status of SABC (a) By its execution of this Agreement, SABC warrants that it is duly incorporated under the laws of the State of California and that true and correct copies of its Articles of Incorporation and Bylaws and a true and correct listing of SABC's officers and their terms of office, certified as such by SABC's Secretary, have been filed with the Clerk of the Council. (b) By its execution of this Agreement, City accepts and agrees to the organization of the SABC as set forth in the above said Articles of Incorporation and Bylaws. § 1.03 Compensation of SABC Board Members and Meetings (a) Meetings shall be held on a quarterly basis with more meetings called at the discretion of the SABC Board. When conducting meetings related to the Downtown Santa Ana Business Improvement Area, members of the Board shall serve without compensation other than reimbursement for expenses incurred by them in the course of the performance of services for SABC when authorized by the SABC Board. (b) SABC shall conduct its meetings in accordance with the Ralph M. Brown Act; the number of board members for purposes of the Brown Act shall consist of _ board members, with board members serving as a quorum. § 1.04 Changes in Officers, Articles and Bylaws SABC shall notify the Clerk of the Council of any change in the membership of the Board and any change in the officers of SABC. Any amendment of SABC's Articles or Bylaws shall be filed with the Clerk of the Council. §L05 City Representation at Meetings of SABC The City Manager shall be entitled to attend all meetings of SABC related to the BID and to participate in the discussions of the Board to the same extent as the members of the Board, and SABC shall assure that the City Manager is provided with reasonable advance notice of all meetings of SABC. Nothing herein shall be construed to provide the City Manager with any authority to make, second, or vote on motions, or to cause him to be counted for purposes of 3 25D-17 etermining whether a quorum exists at meetings of SABC. §L06 City Residents/Business Operators on the Board A majority of the Board shall be City residents or business operators. If the number of members who are City residents or business operators becomes less than a majority due to the death, resignation, or change of residence or business location, SABC shall not be in default under this section, provided, however, that the next member appointed to the Board shall be a City resident or business operator. ARTICLE 2 REPORTS AND RECORDS AND BID FUND TRANSFERS § 2.01 Annual Budget and Program Report (a) No later than November First (I") of each year, SABC shall provide the City Manager with a copy of a detailed calendar year operating budget showing expected sources of revenue and the nature of all expected or proposed expenditures for the forthcoming calendar year and a report on the proposed programs to be undertaken by SABC in said calendar year. (b) The proposed budget shall be submitted to the City Council for approval subject to the procedures provided for in California Streets and Highway Code Section 36530 et seq. If the proposed budget is accepted by the City Manager, it shall be submitted to the City Council for approval, in whole or in part. If the proposed budget is rejected by the City Manager, the City Manager and SABC shall meet in good faith in an attempt to reach agreement on a budget. If they are unable to do so, the City Manager shall submit the SABC's proposed budget to the City Council for approval, in whole or in part. (c) SABC acknowledges that its proposed budget in any given calendar year will consist of 50% of all BID assessments collected from businesses subject to the Downtown Santa Ana Business Improvement Area as reflected in Ordinance NS-1715. (d) SABC further acknowledges that the use of all BID proceeds will be subject to the BID laws as currently exist and/or as may be modified in the future; and that expenditures of BID funds will be for the purposes identified in Ordinance NS-1715. (e) The City shall establish and maintain in its accounting system a trust fund account for the deposit of BID assessment monies collected together with a specific account activity code which shall reflect the deposit and expenditure reimbursement of BID assessment monies apportioned for use by SABC pursuant to subsection (c) above. (f) SABC shall have the option for the first year of this Agreement to request an advance 4 25D-18 f up to twenty thousand dollars ($20,000.00) from the City upon presentment of written documentation indicating anticipated expenses in furtherance of the purposes identified in Ordinance NS-1715. Such written documentation shall be approved by the Executive Director of Community Development Agency or his or her designee. Any such advance shall be deducted from BID assessment monies collected and deposited. SABC agrees that such advance shall only apply to the first the $20,000.00 of available funds and before any subsequent reimbursements can be made, SABC shall sufficiently document such advance by accompanying receipts, purchase invoices, or other permanent evidences of expenditure as may be prudently required by the City in accordance with Generally Accepted Accounting Principles and established City accounting procedures. (g) The City shall make all reasonable good-faith efforts to deposit BID assessment monies collected each month by the 15`h day of the month following; provided that where the 15`" day falls on a weekend, holiday, or other day in which City Hall is closed, then said deposit shall be made the next day City Hall is open. (h) The City shall also deposit monthly an interest payment equivalent to the average amount of the daily balances for the period of the preceding month. (i) The City upon depositing BID assessment monies shall notify SABC by electronic mail of the net amount of monies available for reimbursement to SABC. Failure by SABC to receive or acknowledge electronic mail notification shall not constitute a breach of this Agreement. 0) The City upon receipt of a written request for reimbursement submitted by SABC for documented expenses, shall inspect and examine each request to ensure that all expenses submitted for reimbursement are for the purposes identified in Ordinance NS-1715 and that all expenses submitted are sufficiently documented by accompanying receipts, purchase invoices, or other permanent evidences of expenditure as may be prudently required by the City in accordance with Generally Accepted Accounting Principles and established City accounting procedures. Reimbursement requests shall be approved by the Executive Director of the Community Development Agency or his or her designee. (k) The amount of any approved reimbursement made by the City shall not exceed the net funds available for such reimbursement. In the event that a reimbursement request submitted by SABC exceeds the balance of available funds, the City shall prorate the reimbursement accordingly. (1) The City shall make all reasonable good-faith efforts to process reimbursement requests within 15 working days and to issue a reimbursement check for the approved amount or make equivalent electronic payment to SABC. (m) In the event questions arise relating to the balance of funds available to SABC, SABC may within 15 days of notification request an accounting by the City of the amount of net 5 25D-19 unds available for reimbursement to SABC. (n) In the event questions arise relating to the amount of any specific reimbursement to SABC approved by the City, SABC may, within 15 days of such reimbursement payment, request that the City re-evaluate the amount of such reimbursement. Thereupon the City shall re- evaluate the amount of such reimbursement and give written notification of its decision to SABC which shall be final and conclusive. § 2.02 Annual Financial Statement and Audit Within sixty (60) days following notice by the City, SABC shall submit to the City Manager a complete statement of SABC's revenues and expenditures and a financial audit for the preceding calendar year prepared by an independent certified public accountant. § 2.03 Financial Records SABC shall keep, or cause to be kept, true, accurate and complete records, including double-entry books, a profit and loss statement, and a balance sheet, such that if possible at all times to determine the amount and nature of all revenues and expenditures. All expenditures and transactions shall be supported by documents of original entry such as sales slips, cash register tapes, and purchase invoice and receipts. All such account books, statements, balance sheets and supporting documents shall be retained by SABC for a period of three (3) years after the end of the accounting year to which they pertain. § 2.04 Accounting Procedures SABC shall maintain a system of accounting according to Generally Accepted Accounting Practices. § 2.05 Inspection and Audit City shall be entitled, during the term of this Agreement and for a period of one year following the termination, to: (a) inspect and examine all of SABC's books, statements, records, and supporting documents to ascertain the correctness of SABC's financial statements. Any such inspection and/or examination shall be conducted during normal business hours with prior 15 days written notice to SABC; and (b) inspect and examine each request for reimbursement received from SABC to ascertain that all expenses submitted for reimbursement are for the purposes identified in Ordinance NS- 1715 and that all expenses submitted are sufficiently documented by receipts, purchase invoices, or other permanent evidences of expenditure in accordance with Generally Accepted Accounting 6 25D-20 rinciples and established City accounting procedures. Any such inspection and/or examination shall be conducted during normal business hours with prior 15 days written notice to SABC. ARTICLE 3 INDEMNITY AND INSURANCE § 3.01 Indemnification SABC shall indemnify and save harmless City and its officers, agents and employees from and against any and all claims, demands, loss or liability of any kind or nature which City or its officers, agents, or employees may sustain or incur, or which may be imposed upon them, or any of them, as a result of, arising out of, or in any manner connected with SABC's management and/or administration of the BID funds. § 3.02 Insurance Requirement Generally Prior to the Commencement Date (except as hereinafter otherwise provided), SABC shall obtain at its sole cost and file with the Clerk of the Council, and maintain throughout the Term, policies of insurance as required by this section and sections 3.03 through 3.05, or a certificate of such insurance, satisfactory in form to the City Attorney. Each such policy (except policies of Workers' Compensation Insurance) shall name City as an insured or additional insured and each liability insurance policy shall also name the officers, agents and employees of City as insureds or additional insureds. Each such policy shall also contain a provision that no termination, cancellation or change of coverage or (where applicable) of insured or additional insured shall be effective until after thirty (30) days notice thereof has been given in writing to City. § 3.03 Liability Insurance SABC shall provide a policy or policies of insurance which provides coverage not less than that provided in the form of a comprehensive general liability insurance policy against liability for any and all claims and suits for damages or injuries to persons or property resulting from or arising out of the operations of SABC, its officers, employees, agents or assigns. Said policy or policies of insurance shall provide coverage for both bodily injury and property damage in not less than One Million Dollars ($1,000,000.00) combined single limit, or its equivalent. § 3.04 Fidelity Bonding SABC shall provide a policy or policies of insurance insuring SABC against loss due to dishonesty of SABC's officers, agents and employees. Said policy or policies shall provide coverage in not less than $1,000,000. 7 25D-21 3.05 Workers' Compensation Insurance law. SABC shall provide a policy or policies of workers' compensation insurance as required by § 3.06 Modification of Insurance Requirements The City Manager may modify or suspend the requirements imposed on SABC by this Article if in his reasonable determination; strict compliance is impossible or excessively costly due to insurance market conditions. ARTICLE 4 DEFAULTS, REMEDIES AND TERMINATION § 4.01 Defaults (a) Failure or delay by either parry to perform any term or provision of this Agreement shall constitute a default under this Agreement. The injured party shall not initiate the remedies hereinafter provided until the defaulting parry has been given written notice of the default, specifying the nature thereof, and a period of sixty (60) days to cure or correct such default. (b) Any failure or delay by either party in asserting any of its rights or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. § 4.02 Remedies of City In the event of any default and failure to cure, correct or remedy the same by SABC, City may, at City's sole discretion, in addition to or in lieu of any other remedies, exercise either of the following remedies: (a) Delay of any or all transfers of BID funds to SABC collected pursuant to § 2.01 of this Agreement until such default is cured, corrected or remedied; provided such delay is approved by the City Council. (b) Terminate this Agreement, provided such termination is approved by the City Council. § 4.03 Legal Actions In addition to any other rights or remedies, either parry may institute legal action to cure, 8 25D-22 orrect or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal action must be instituted in the Superior Court of the County of Orange, State of California, or in any other appropriate court in that county. § 4.04 Cumulative Rights and Remedies The rights and remedies of the parties are cumulative and the exercise by either party of one or more such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. § 4.05 Termination Upon the expiration of the Term or upon the earlier termination of this Agreement as provided in Section 1.01(f) or Section 4.02 the City shall have no further obligation to provide funding or other assistance to SABC pursuant to this Agreement for any period following such expiration or early termination. ARTICLE 5 GENERAL PROVISIONS § 5.01 Representatives (a) All actions authorized to be taken by City pursuant to this Agreement, without specification in this Agreement as to the body or office so authorized, shall be deemed exercisable on behalf of City by the City Manager, unless otherwise stated. The City Manager may designate any officer of the City as his or her representative with respect to any specified authority given to the City Manager by this Agreement, and in such event the actions of such officer within the scope of such authority shall have the same effect as if taken by the City Manager. (b) All actions authorized to be taken by SABC pursuant to this Agreement, without specification in this Agreement as to the body or office so authorized, shall be deemed exercisable on behalf of SABC by SABC's governing board or by such officer of SABC as may be designated by resolution of said governing board. § 5.02 Notices Notices and written communications sent by one party to the other shall be either personally delivered or sent by U.S. Mail, postage prepaid, to the following addresses: (a) If sent by SABC to City: 25D-23 lerk of the Council City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 With Copies to: City Manager City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 And: City Attorney City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 (b) If sent by City to SABC: Santa Ana Business Council Inc. 400 E. Fourth Street Santa Ana, CA 92701 Attention: Chairman of the Board § 5.03 Non-assignability The rights and obligations of SABC under this Agreement may not be assigned or delegated without the prior approval of the City Council. § 5.04 Partial Invalidity If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect, and shall in no way be affected, impaired or invalidated thereby. §5.05 Exclusivity Each party to this Agreement acknowledges that no representations, inducements, 10 25D-24 romises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement or amendment hereto shall be effective unless executed in writing and signed by both City and SABC. §5.06 Conflict of Interest Clause SABC covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance under this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. ATTEST: Maria D. Huizar Clerk of the Council CITY OF SANTA ANA: Kevin O'Rourke Interim City Manager APPROVED AS TO FORM: Jose Sandoval Chief Assistant City Attorney Santa Ana Business Council, Inc.: Title: 25D-25 5D-26 xhibit 3 DOWNTOWN BUSINESS IMPROVEMENT DISTRICT PROPOSED BUDGETS SUMMARY 2013 OPERATING FUND REVENUE BID Assessments - current .........................................................$250,000 Prior Year Carry Forward ............................................................$0 Total Revenue $250,000 EXPENDITURES Downtown Inc. ADMINISTRATION Overhead (Supplies, insurance, misc) ..................................$6,000 MARKETING Special Events Sound Downtown/Restaurant Week $10,000 OC Pride $5,000 Day of the Dead $5,000 Patchwork (2x) $10,000 Downtown Santa Ana Film Festival $5,000 OC Fashion Week $5,000 Other $12,000 Total .................................................................... $52,000 Advertising (Print/Online) .................................................$57,000 OTHER PROGRAMMING Restaurant Association .................................................... $5,000 Artist Retention Program ...................................................$5,000 Total $125,000 Page 1 of 2 25D-27 Office Rent is being subsidized by a DTI Board member. Santa Ana Business Council Inc. ADMINISTRATION Overhead (Office rental, supplies, insurance, misc) ................$12,500 MARKETING Special Events ................................................. Artwalk / Sidewalk sale (Spurgeon & 4th Stre Valentine's Day Spring Festival & St. Patrick's Day Quinceanera Expo Mother's Day Father's Day 4th of July Art Fair 16th & Film Festival Lucha Libre & Halloween Noche de Altares Christmas ............. $40,000 It) $2,000 $1,000 $2,000 $3,000 $8,000 $1,000 $3,000 $2,000 $5,000 $6,000 $3,000 $4,000 Advertising (Print/Online) ................................................. $50,625 Newsletters ................................................................... $8,750 Website & Social Media ....................................................$8,750 OTHER PROGRAMMING Holiday Promotions .........................................................$4,375 Total Total Expenditures $125,000 $250,000 Page 2 of 2 2501-28