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HomeMy WebLinkAboutStaff Report 112-07City of Palo Alto City Manager’s Report TO:CITY COUNCIL FROM: DATE: SUBJECT: CITY MANAGER JANUARY 16, 2007 TRANSMITTAL DEPARTMENT: COMMUNITY SERVICES CMR: 112:07 OF A DRAFT REVISION TO THE PUBLIC/PRIVATE PARTNERSHIP POLICY FROM THE POLICY AND SERVICES COMMITTEE RECOMMENDATION The Policy and Services Committee recommends Council approval of the attached update to the City’s Public/Private Parmership Policy (Attachment A). BACKGROUND The Policy and Services Committee has met on two separate occasions to review and revise the City’s Public/Private Partnership Policy. At its November 2, 2006 meeting, the Committee voted unanimously to recommend to Council approval of the updated policy, contingent on wording changes that are highlighted in italics in Attachment A. DISCUSSION The revised policy refines the existing policy (Attachment B) in that it now delineates three types of public/private partnerships available to the public as Alliances, Joint Ventures and Co-sponsorships. The new policy also sets forth guidelines providing the public a better understanding of the process and that clarifies the relationship between the City and partnering organizations. RESOURCE IMPACT Public/private partnerships can be beneficial by providing a way to leverage City resources; however, careful consideration must be made to the use of all City funding sources. POLICY IMPLICATIONS This report does request a change in City policy as described above. ENVIRONMENTAL REVIEW This recommendation is not a project under the California Environmental Quality Act. CMR 112:07 Page 1 of 2 ATTACHMENTS Attachment A: 1/4/2007 Draft Public/Private Partnership Policy Attachment B" Policy and Procedure 1-25, PUBLIC/PRIVATE PARTNERSHIPS PREPARED/APPROVED BY: RICHARD Director of Services CITY MANAGER APPROVAL: Assistant City Manager CMR 112:07 Page l of 2 Attachment A PUBLIC/PRIVATE PARTNERSHIP POLICY STATEMENT The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. A public/private parmership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. The City’s participation may include: Solicitation of service or facility proposals Facilitation of such proposals through the City’s regulatory process Waiver of City fees to help reduce project costs. Contributions of City matching funds for construction of facilities to be owned and controlled or operated by the City. Provision of facilities to the private partner at no charge or at a subsidized rent. This policy defines the three types of public/private partnerships that the City most often enters into: Alliances, Joint Ventures and Co-sponsorships. Alliances represent agreements with organizations whose core mission is to support City programs and services by investing resources in one or more City activities or facilities either through contribution of funds or through in-kind services. The organization does not expect to receive any direct financial benefit or to alter City policy and/or operations, but undertakes to work closely and cooperatively with staff to implement City goals. Alliances have been central to the success of many City programs and facility improvements. Examples of Alliances include the Art Center Foundation’s annual funding of Project Look and Cultural Kaleidoscope, the Friends of the Children’s Theatre funding and building of the Magic Castle, and the Library Foundation and Friends of the Library financial assistance with renovation of the Children’s Library. Joint Ventures result when an organization enters into a contractual relationship with the City to collaborate on a project or activity with both parties contributing to the partnership for their mutual benefit. Examples of joint ventures include Theatre Works, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the use of the former police station by older adult service provider Avenidas. Co-Sponsorships arise when an organization furthers the mission of the City by supporting a City activity or program in exchange for an in-kind or other benefit. Co-sponsorships can take the form of one-time events or annual agreements. Some examples of co-sponsorships include the Palo Alto Tennis Club use of City courts to provide a youth tennis program, American Youth Soccer Organization’s use of space in a City facility to train referees, and the Palo Alto Recreation Foundation’s use of the Lucie Stem Center to present the Palo Alto Black and White Ball. Guidelines: The following guidelines enable the City to respond promptly and comprehensively to proposals for a public/private partnership. Proposals are generally initiated by and/or received by City staff from the non-profit and private sector. Proposals may also be received through Council referral to staff. City staff and the partnering Alliance organization will jointly determine the specific terms and outcome of a project or activity. Due to government procuring and labor requirements, Ci& stqf_f will manage most proposed 2 projects and activities unless a request has been made by the Alliance organization to provide in-kind services or to provide direct oversight or management of spec~12ed projects. In these cases the project must meet the approval of the Cit7 Attorne~ and Cit~ risk mana,~er. To ensure the viability of the project, partnering organizations should possess and demonstrate sound organizational, administrative and fiscal management. The partnering organization should also have the experience to achieve and sustain project tasks, such as fundraising and building community support. For facility improvement or expansion initiatives, the parmering organization should be prepared to make a substantial commitment to the proposed proiect’s cost. Long-term staffing, operational and maintenance costs must be identified in the proposal. If appropriate to the project, costs and funding sources for furniture, fixtures and equipment must also be identified. The responsibility for cost overruns on all projects will be negotiated and predetermined between the two parties on a project-by- project basis. Scheduling of projects will be determined by staff with Council. approval and is subject to existing project schedules, staffing capacity and Council priorities. City-initiated Joint Ventures, where the City is actively recruiting a Joint Venture partner, will be guided by existing policies and procedures governing purchasing and outsourcing, using "requests for proposals" and!or bid processes as the method of initiating a partnership. A City-initiated Joint Venture may incorporate incentives including, for example, naming rights, waiver of non-enterprise fund building and planning fees, reduced lease rates, free use of space, subsidies, and staff resources. All incentives may be negotiated on a case-by-case basis. Staff/Council Review As required, the City Manager or his designee will convene an ad hoc committee of representatives from departments affected by the proposal to evaluate and make a recommendation on its merit. In such cases as listed below, the City Manager’s recommendation will be forwarded to City Council for approval. Council approval will be necessary when: Unbudgeted City funds and/or resources are required to complete a requested project. ,A request to waive City fees is made. "The request is not within established Councilpriorities. "An option to lease or license a facility for the facilitation of pro-bono or other cost-cutting opportunities is requested. (In all cases this shall be consistent with Policy and Procedure 1-11/ASD, Leased Use of City Land/Property) Memorandums of agreement are necessary for projects that are complex in nature or that may take place over an extended time period. ~Due to ongoing budget limitations, projects with higher levels ot° outside funding may be prioritized above other projects _for approval and implementation. Should staff deny a Joint Venture request, the requesting party may appeal the decision to the Finance Committee for recommendation to Council ~’or final resolution. Each department that incorporates co-sponsorships into its program will develop rules and regulations for the initiation and maintenance of co- sponsorships. These guidelines will be approved by the City Manager under Municipal Code section 2.08.050 "Rules and Regulations" which gives the City Manager authority to create administrative rules and regulations and provides Council a period for review. All co-sponsorship requests will be reviewed and approved by the appropriate department head. Fee Waiver Staff may recommend, as part of its review of a proposal, that any standard City processing or use fee authorized under the Municipal Fee Schedule, excluding fees and charges levied by City of Palo Alto Utilities or other City enterprise fund programs, should be waived as a condition of the City’s participation. Waiver of fees may be granted by the Council and limited to those fees associated with a construction or capital improvement project which, upon its completion, results in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only a portion of a construction or capital improvement project will result in a new or improved City facility, building or park, or portion thereof, then the Council may waive only that portion of any associated fee directly relating to the construction, improvement or enhancement of the City facility, building or park. As appropriate, the summa~_ and recommendation in the report to the Council will include a stqff recommendation on waiving fees which the Council can approve or ~ect. POLICY AND PROCEDURES 1-25/MGR Revised: March 2003 PUBLIC/PRIVATE PARTNERSHIPS POLICY STATEMENT It is the policy of the City of Palo Alto to encourage the development of public/private partnerships for public benefit. A public/private partnership is defined as cooperation between the City and private sector or nonprofit organizations in providing services, facilities or other capital projects to the community. This policy and its implementing procedures were approved by the City Council on February 28, 1994. Public/private partnerships may take different forms. Two of the most common include: Cooperative partnerships: This approach assumes cooperation between the public and private or nonprofit sectors in order to achieve mutually shared objectives. Examples include construction of the expansion to the Children’s Theatre and the City’s relationships with the Senior Center and the Palo Alto Housing Corporation. ¯Inducements: In this approach, the City structures incentives that change the market environment in which the private sector operates in order to achieve social goals. An example would be the PARTNERS program in the Utilities Department. City Role in Partnership Formation The City has historically acted primarily as a passive recipient of proposals for public/private partnerships. It is the intent of this policy, however, to promote the active participation of the City in the formation of such partnerships. "Active participation" could include: Facilitation of proposals through the City’s regulatory process (e.g. Downtown Childcare Center); Solicitation of proposals for public/private ventures (e.g., Tower Well site, Chuck Thompson site); Waiver of fees by the City Council for construction of facilities to be owned, or controlled, and operated by the City (e.g. Hoover Park Restroom, Rebuilding Together); Use of facilities/subsidized rent (e.g., Cubberley). PROCEDURE Proposals for a public/private partnership opportunity are normally received by City staff from private sector or nonprofit organizations. They may also be referred by the City Council to staff for review and recommendation. Page 1 of 2 POLICY AND PROCEDURES 1-25/MGR Revised: March 2003 An important component for facilitating public/private partnerships is the ability of the City to react quickly and comprehensively to a proposal. Also of importance for some proposals is the impact of City processing fees. The following procedures establish a mechanism to obtain prompt and comprehensive initial City review of a proposal and consideration of requests for waiving City fees. Public/Private Committee A Public/Private Review Committee shall be appointed by the City Manager, with representation from all major City departments, as well as the City Attorney’s Office. As appropriate, staff from other depa,rtments who are involved in a public/private proposal may also participate on the Committee. The Committee shall be chaired by the Assistant City Manager. The Committee shall meet as required to review public/private proposals. Pros and cons of a proposal will be identified and discussed. A summary of each private or non-profit sector proposal will be forwarded to the City Council, accompanied by a recommendation from the City Manager to the City Council on whether the City should participate. The summary and recommendation to the City Council will be prepared whether or not the City staff support the proposal as a public/private partnership. Fee Waiver The Public/Private Committee may recommend, as part of its review of a proposal, that any normal City processing or use fees under the Municipal Fee Schedule, not including fees and charges levied by City of Palo Alto Utilities, be waived as a part of the City’s participation in appropriate public/private partnerships. Waiver of fees shall be by the City Council and limited to those fees associated with a construction or capital project which, upon its completion, results in a new or improved public facility, building or park, or some portion thereof, that will be solely owned or controlled by the City. In the event that only some portion of a construction or capital project will result in a new or improved City facility, building or park, or some portion thereof, then the City Council may only waive that portion of any associated fees directly relating to the construction, improvement or enhancement of the City facility, building or park. If appropriate, the sum~nary and recommendation report to the City Council will include a recommendation on waiving fees, and the Council can approve or deny the waiver recommended by staff. NOTE:Questions and/or clarification of this policy should be directed to the Assistant City Manager. Page 2 of 2