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HomeMy WebLinkAbout25D - AGMT DOWNTOWN MERCHANTS FUNDREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: 5 , 2017 TITLE: APPROVE AGREEMENTS WITH DOWNTOWN INC. AND SANTA ANA BUSINESS COUNCIL TO ESTABLISH DOWNTOWN MERCHANTS FUND (STRATEGIC PLAN NO. 3, 4F) (f� CIT MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' 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 agreements with Downtown Inc. and Santa Ana Business Council to establish a Merchants Fund for a period of January 1, 2018 through January 1, 2019 in the amount of $200,000 ($100,000 per organization), subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION On August 4, 2015, the City Council adopted the Downtown Enhancements and Parking Modernization Plan (Plan) to address the need to modernize parking structures, enhance public amenities, and address deferred maintenance in the downtown. As part of the Plan, downtown business associations and stakeholders agreed to an increase in parking rates and the implementation of new smart meters in the downtown area with the understanding that increased revenue from these new rates and smart meters would be reinvested back into the downtown. As part of the Plan, it was proposed that a Downtown Merchants/Validation Fund be created to fund a validation program for participating business and merchants to reward their customers for using the parking structures. Before implementation, both merchant groups and the City staff decided that a validation program was not feasible due to the complicated administration of the program. Downtown Inc. and Santa Ana Business Council requested that the Validation Fund be changed to a Merchants Fund, (Exhibit 1 and 2) for continued promotion and marketing of the downtown (Exhibit 3). Both Associations have provided budgets (Exhibit 4) for the administration of the Merchants Fund. This funding will continue to support strong marketing efforts and will allow for successful year-round administration of events for the Downtown. This additional $100,000 per organization will complement the existing funds each association receives from the City's Business 2501-1 Downtown Merchants Fund Agreements December 5, 2017 Page 2 Improvement District (BID). The agreements will automatically renew each year and can be terminated by the City with proper notification as stated in the agreement. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #3 (Economic Development), Objective 4 (Continue to pursue objectives that shape downtown Santa Ana into a thriving, culturally diverse, shopping, dining, and entertainment destination), Strategy F (Partner with downtown business and merchant associations to program events that showcase restaurants, shopping and entertainment venues). FISCAL IMPACT Funds in the amount of $100,000 are available in the Downtown Enhancements and Parking Modernization Plan account (no. 02710133-62300) for expenditure in FY 17-18. Funds in the amount of $100,000 for the second half of the agreement term will be included and budgeted in the FY 18-19 budget. — - APPROVED AS TO FUNDS AND ACCOUNTS: Robert M. Zur Pchied&--'Francisco Gutierrez Interim Executi irector Executive Director Community Development Agency Finance and Management Services Agency Exhibits: 1. Agreement with Downtown Inc. 2. Agreement with Santa Ana Business Council 3. Letter from Downtown Inc. and SABC 4. DTI and SABC Budgets for Administration 25D-2 EXHIBIT 1 DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT This OPERATING AGREEMENT made and entered into this day of , 2017, 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 ("City"), and -Downtown Incorporated, Inc., a California non-profit corporation ("DTI"). RECITALS A. On August 4, 2015, the City Council adopted the Downtown Enhancements and Parking Modernization Plan to address the need to modernize parking structures, enhance public amenities, and address deferred maintenance in the downtown (Santa Ana Ordinance No. NS - 2880). B. Downtown business associations and stakeholders agreed to an increase in parking rates and the implementation of new smart meters in the downtown area with the understanding that increased revenue from these new rates and smart meters would be reinvested back into the downtown. C. As part of the Plan, it was proposed that a Downtown Merchants Fund ("DMF") be created for continued promotion of the downtown. This funding will continue to support strong marketing efforts and will allow for successful year-round administration of events for the downtown. D. Both DTI and the Santa Ana Business Council have provided budgets for the administration of the DMF. This additional $100,000 per organization will complement the existing funds each association receives from the City's Business Improvement District ("BID"). E. The City and DTI under this Operating Agreement propose to: (1) confirm that DTI will receive $100,000 from the DMF each calendar year that such funding is approved by City Council; (2) to provide that DTI's use of said DMF funds will be consistent with its approved DMF Annual Budget; and, (3) to provide for auditing of DTI's DMF funds. WHEREFORE, and in consideration of the mutual and respective covenants and promises hereinafter set forth, and subject to the terms and conditions of this Operating Agreement, the parties hereto do hereby agree as follows: ARTICLE i PRELIMINARY MATTERS § 1.01 Definitions As used in this Operating Agreement, the following terms shall have the following meanings: 25D-3 (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(s). (d) "DMF" means Downtown Merchants Fund, a fund created from downtown parking revenues to support marketing of the downtown. (e) "DTI" means Downtown Incorporated, Inc., a California nonprofit corporation. (f) `Board" means the Board of DTI. § 1.02 Term This Agreement shall commence on the date first written above and terminate on , 20_, unless terminated earlier in accordance with sections 4.02 or 4.05, below. The Term of this Agreement shall be automatically renewed in one (1) year Renewal Terms, unless terminated earlier in accordance with sections 4.02 or 4.05, below. § 1.03 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 DTI as set forth in the above said Articles of Incorporation and Bylaws. § 1.04 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 DMF, 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. § 1.05 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. 2 25D-4 §1.06 City Representation at Meetings of DTI The City Manager shall be entitled to attend all meetings of DTI related to the DMF 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/her to be counted for purposes of determining whether a quorum exists at meetings of DTI. §1.07 City Residents Downtown Property Owners and Business Operators on the Board A majority of the Board shall be City residents, downtown property owners, or business operators. If the number of members who are City residents, downtown property owners, 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, downtown property owner, or business operator. ARTICLE 2 REPORTS AND RECORDS AND DMF FUND TRANSFERS § 2.01 Annual Budget and Program Report (a) No later than November 1 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. A true and correct copy of DTI's 2018 DMF Annual Budget is attached hereto as Exhibit A and incorporated herein by reference. (b) 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 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 $100,000, or any such amount as previously approved by the City Council. (d) DTI further acknowledges that expenditures of DMF funds will be for the purposes identified in the Downtown Enhancements and Parking Modernization Plan. (e) The City shall provide DTI with $25,000 of DMF funds each quarter (January 1, April 1, July 1, and October 1) for a total of $100,000 of DMF per year. If the first day of the quarter 25D-5 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. (f) The City upon depositing DMF monies shall notify DTI by electronic mail of the net amount of funds deposited to DTI. Failure by DTI to receive or acknowledge electronic mail notification shall not constitute a breach of this Agreement. (g) All DMF expenditures must be for the purposes identified in the Downtown Enhancements and Parking Modernization Plan, and must be 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. If DTI expends any DMF money for unauthorized purposes, the City may, at its sole option, deduct the disputed amount from any future DMF payments to DTI, or may terminate the Agreement pursuant to the terms of section 4.05. (h) In the event questions arise relating to the payment of funds to DTI, DTI may within 15 days of notification request an accounting by the City of the amount of net funds disbursed to DTI. Thereupon the City shall re-evaluate the amount of such disbursement and give written notification of its decision to DTI which shall be final and conclusive. § 2.02 Bi -Annual Financial Statement and Audit Every six (6) months (June 30 and December 31), DTI shall submit to the City Manager a complete statement of DTI's revenues and expenditures and a financial audit for the preceding half- 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. 0 25D-6 § 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 expense made by DTI to ascertain that all expenses are for the purposes identified in the Downtown Enhancements and Parking Modernization Plan, and that all expenses 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. ARTICLE 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 DMF funds. § 3.02 Insurance Requirement Generall 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) day 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 25D-7 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 $500,000. § 3.05 Workers' Compensation Insurance DTI shall provide a policy or policies of workers' compensation insurance as required by law. § 3.06 Modification of Insurance Requirements The City Manager may modify or suspend the requirements imposed on DTI by this Article if in his/her 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 DMF funds to DTI pursuant to §2.01 of this Agreement until such default is cured, corrected or remedied; provided such delay is approved by the City Council. 25D-8 (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. § 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 This Agreement may be terminated by the City for any reason upon thirty (30) days written notice of termination. Upon any termination, or expiration of the Term, 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/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 party to the other shall be either personally delivered or sent by U.S. Mail, postage prepaid, to the following addresses: 25D-9 (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 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 DTI: Downtown Inc. 200 North Main St. 2"d Floor Santa Ana, CA 92701 Attention: Chairman of the Board § 5.03 Non-assienabilit 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 Invalidit 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. 25D-10 §5.05 Exclusivitv 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. §5.06 Conflict of Interest Clause DTI 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. (signature page follows} 25D-11 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 APPROVED AS TO FORM: SONIA R. CARVALHO City Attorj;ey By: —� Ryan O. RECOMMENDED FOR APPROVAL: ROBERT ZUR SCHMIEDE Executive Director — CDA CITY OF SANTA ANA RAUL GODINEZ II City Manager DOWNTOWN, INC. (NAME) (Title) Tax ID# 10 25D-12 EXHIBIT A DOWNTOWN MERCHANTS FUND ANNUAL BUDGET 25D-13 Exhibit 4 Santa Ana Business Council Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100,000 PARKING Expenses Administrative/ Personnel Costs $18,000 Consulting Services, Contractors/Professional Services $23,300 Grant Writer, Specialized Nonprofit Accountant Meetings/StakeholderGroups/rraining $20,000 Entrepreneurship and Small Business Education Development Marketing/Promotions $9,700 Building Downtown Business &Community Engagement Team, Internship Program Events/EntertainmentlSponsorships $14,000 Downtown Activation,Circulation, Flows, Urban Tacticaiism, Pilot Projects Communications $15,000 News, Print Media, Photography, Vfdeography, Social Media Support Services TOTAL $100,000 Downtown Inc. Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100.000 PARKING Expenses Personnel Costs $42,500 Director, Administrative Support Contractors/Professional Services $15,000 Event Producers, Program Coordinators, Production Staff Meetings/StakeholderGroupslrraining $12,500 Restaurant Assoc., Arts Meetings, Staff& Stakeholder Development Marketing/Promotions/Events $12,500 Maps, Guides, Savor Santa Ana, Artwalk Communication $10,000 Newsletter, Social Media, Translation, Design, Videos, Photos Office/Operations/Technology $7,500 Office Supplies, Web hosting, Subscription Technology Software TOTAL $100,000 2501-14 Exhibit 2 DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT This OPERATING AGREEMENT made and entered into this day of , 2017, 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 ("City"), and the Santa Ana Business Council, a California non-profit corporation ("SABC"). RECITALS A. On August 4, 2015, the City Council adopted the Downtown Enhancements and Parking Modernization Plan to address the need to modernize parking structures, enhance public amenities, and address deferred maintenance in the downtown (Santa Ana Ordinance No. NS - 2880). B. Downtown business associations and stakeholders agreed to an increase in parking rates and the implementation of new smart meters in the downtown area with the understanding that increased revenue from these new rates and smart meters would be reinvested back into the downtown. C. As part of the Plan, it was proposed that a Downtown Merchants Fund ("DMF") be created for continued promotion of the downtown. This funding will continue to support strong marketing efforts and will allow for successful year-round administration of events for the downtown. D. Both SABC and Downtown, Inc. have provided budgets for the administration of the DMF. This additional $100,000 per organization will complement the existing funds each association receives from the City's Business Improvement District ("BID"). E. The City and SABC under this Operating Agreement propose to: (1) confirm that SABC will receive $100,000 from the DMF each calendar year that such funding is approved by City Council; (2) to provide that SABC's use of said DMF funds will be consistent with its approved DMF Annual Budget; and, (3) to provide for auditing of SABC's DMF funds. WHEREFORE, and in consideration of the mutual and respective covenants and promises hereinafter set forth, and subject to the terms and conditions of this Operating Agreement, the parties hereto do hereby agree as follows: ARTICLE 1 PRELIMINARY MATTERS § 1.01 Definitions As used in this Operating Agreement, the following terns shall have the following meanings: 25D-15 (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(s). (d) "DMF" means Downtown Merchants Fund, a fund created from downtown parking revenues to support marketing of the downtown. (e) "SABC" means Santa Ana Business Council, a California nonprofit corporation. (f) `Board" means the Board of SABC. § 1.02 Term This Agreement shall commence on the date first written above and terminate on , 20_, unless terminated earlier in accordance with sections 4.02 or 4.05, below. The Term of this Agreement shall be automatically renewed in one (1) year Renewal Terns, unless terminated earlier in accordance with sections 4.02 or 4.05, below. § 1.03 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 SABC as set forth in the above said Articles of Incorporation and Bylaws. § 1.04 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 DMF, 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. § 1.05 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. 2 25D-16 § 1.06 City Representation at Meetings of SABC The City Manager shall be entitled to attend all meetings of SABC related to the DMF 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/her to be counted for purposes of determining whether a quorum exists at meetings of SABC. §1.07 City Residents. Downtown Property Owners and Business Operators on the Board A majority of the Board shall be City residents, downtown property owners, or business operators. If the number of members who are City residents, downtown property owners, 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, downtown property owner, or business operator. –------- ---- -—ARTICLE 2--------- - -- – - — REPORTS AND RECORDS AND DMF FUND TRANSFERS § 2.01 Annual Budget and Program Report (a) No later than November 1 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. A true and correct copy of SABC's 2018 DMF Annual Budget is attached hereto as Exhibit A and incorporated herein by reference. (b) 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 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 $100,000, or any such amount as previously approved by the City Council. (d) SABC further acknowledges that expenditures of DMF funds will be for the purposes identified in the Downtown Enhancements and Parking Modernization Plan. (e) The City shall provide SABC with $25,000 of DMF funds each quarter (January 1, April 1, July 1, and October 1) for a total of $100,000 of DMF per year. If the first day of the 25D-17 quarter 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. (f) The City upon depositing DMF monies shall notify SABC by electronic mail of the net amount of funds deposited to SABC. Failure by SABC to receive or acknowledge electronic mail notification shall not constitute a breach of this Agreement. (g) All DMF expenditures must be for the purposes identified in the Downtown Enhancements and Parking Modernization Plan, and must be 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. If SABC expends any DMF money for unauthorized purposes, the City may, at its sole option, deduct the disputed amount from any future DMF payments to SABC, or may terminate the Agreement pursuant to the terms of section 4.05. (h) In the event questions arise relating to the payment of funds to SABC, SABC may within 15 days of notification request an accounting by the City of the amount of net funds disbursed to SABC. Thereupon the City shall re-evaluate the amount of such disbursement and give written notification of its decision to SABC which shall be final and conclusive. § 2.02 Bi -Amoral Financial Statement and Audit Every six (6) months (lune 30 and December 31), SABC shall submit to the City Manager a complete statement of SABC's revenues and expenditures and a financial audit for the preceding half- 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. 25D-18 § 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 expense made by SABC to ascertain that all expenses are for the purposes identified in the Downtown Enhancements and Parking Modernization Plan, and that all expenses 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 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 DMF 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) day 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 25D-19 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 $500,000. § 3.05 Workers' Compensation Insurance SABC shall provide a policy or policies of workers' compensation insurance as required by law. § 3.06 Modification of Insurance Requirements The City Manager may modify or suspend the requirements imposed on SABC by this Article if in his/her 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 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 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 SABC, City may, at City's sole discretion, in addition to or in lieu of any other remedies, exercise either of the following remedies: 25D-20 (a) Delay of any or all transfers of DMF funds to SABC 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. § 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 This Agreement may be terminated by the City for any reason upon thirty (30) days written notice of termination. Upon any termination, or expiration of the Term, 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/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. 7 25D-21 § 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: With Copies to: And: (b) If sent by City to SABC: Clerk of the Council City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 City Manager City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 City Attorney City of Santa Ana 20 Civic Center Plaza P.O. Box 1988 Santa Ana, CA 92702 Santa Ana Business Council § 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 25D-22 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 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. {signature page follows) 25D-23 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 APPROVED AS TO FORM: SONIA R. CARVALHO RECOMMENDED FOR APPROVAL: ROBERT ZUR SCHMIEDE Executive Director — CDA CITY OF SANTA ANA PAUL GODINEZ II City Manager SANTA ANA BUSINESS COUNCIL (NAME) (Title) Tax ID# 10 25D-24 EXHIBIT A DOWNTOWN MERCHANTS FUND ANNUAL BUDGET 25D-25 Exhibit 4 Santa Ana Business Council Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100,000 PARKING Expenses Administrative/ Personnel Costs $18,000 Consulting Services, Contractors/Professional Services $23,300 Grant Writer, Specialized Nonprofit Accountant Meetings/StakeholderGroups(Training $20,000 Entrepreneurship and Small Business Education Development Marketing/Promotions $9,700 Building Downtown Business &Community Engagement Team, Internship Program Events/Entertainment/Sponsorships $14,000 Dovrntovvn Activation,Circuiation, Flows. Urban Tacticalism, Pilot Projects Communications $15,000 News, Print Media, Photography, Videography, Social kledia Support Services TOTAL $100,000 Downtown Inc. Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100,00 PARKING Expenses Personnel Costs $42,500 Director, Administrative Support Contractors/Professional Services $15,000 Event Producers. Program Coordinators. Production Staff Meetings/StakeholderGroups/Training $12,500 Restaurant Assoc , Arts P;ieetings, Staff & Stakeholder Development Marketing/Promotions/Events $12,500 Maps, Guides, Savor Santa Ana, Artwalk Communication $10,000 Newsletter, Social Media. Translation, Design.. Videos, Photos Office/Operations/Technology $7,500 Office Supplies, Wei, hosting, Subscription Technology Software TOTAL $100,000 25D-26 Exhibit 3 Ryan Chase President Downtown Inc. 200 N. Main St. Santa Ana, CA 92701 David Cavazos City Manager City of Santa Ana 30 Civic Center Plaza Santa Ana, CA 92701 November 22, 2016 Dear City Manager David Cavazos, Raul Yanez President Santa Ana Business Council 400 E. 4th St. Santa Ana, CA 92701 In 2014, the City of Santa Ana and downtown BID groups entered an agreement to increase the price of parking downtown with the requirement that parking revenues be reinvested in the downtown. This program has been widely successful: adding four new beat cops to our streets. improving lighting in the parking garages and constructing a public bathroom on 3rd and Bush Streets. In the initial talks between the City of Santa Ana and the downtown BID groups, these projects and others were listed on a spreadsheet of projects to fund from the parking revenue. One of the original line items in the parking proposal was to give $100,000 to each BID management organization to expand marketing and promotions for downtown_ At the time, the BID groups requested that the $200,000 proposed to be given to them be used to create a City of Santa -hosted validation program that would allow customers to gain access to some free parking while shopping downtown. In our more recent conversation with downtown liaison Victor Negrete, we learned that the City has assessed that implementing the validation program as a marketable public program is not possible in the way we had originally hoped. Therefore, we are writing to request 25D-27 you to revert the $200,000 line item in the parking projects fund pipeline back to die original intent, and have it go toward the BIDs communication, marketing and promotion of downtown. The boards of both Santa Ana Business Council, Downtown Inc. and the Downtown Restaurant Association have all voted to amend the contract with this new request. Please let us know what steps are required to amend the agreement at your earliest convenience. Warm regards, _0/� Ryan Chase President Downtown Inc. Raul Yanez President Santa Ana Business Council 25D-28 Exhibit 4 Santa Ana Business Council Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100,000 PARKING Expenses Administrative/ Personnel Costs $18,000 Consulting Services, Contractors/Professional Services $23,300 Grant Writer, Specialized Nonprofit Accountant Meetings/StakeholderGroups/Training $20,000 Entrepreneurship and Small Business Education Development Marketing/Promotions $9,700 Building Downtown Business &Community Engagement Team, Internship Program Events/Entertainment/Sponsorships $14,000 Downtown Activation, Circulation, Flows, Urban Tacticalism, Pilot Projects Communications $15,000 News, Print Media, Photography, Videography, Social Media Support Services TOTAL $100,000 Downtown Inc. Proposed "Merchant Fund" Revenue FY 2017-2018 Budget PARKING Revenue Merchant Fund (Parking Revenue TOTAL $100,000 PARKING Expenses Personnel Costs $42,500 Director, Administrative Support Contractors/Professional Services $15,000 Event Producers, Program Coordinators, Production Staff Meetings/StakeholderGroupslfraining $12,500 Restaurant Assoc., Arts Meetings, Staff & Stakeholder Development Marketing/Promotions/Events $12,500 Maps, Guides, Savor Santa Ana, Artwalk Communication $10,000 Newsletter, Social Media, Translation, Design, Videos, Photos Office/Operations/Technology $7,500 Office Supplies, Web hosting, Subscription Technology Software TOTAL $100,000 2501-29 25D-30