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HomeMy WebLinkAboutStaff Report 221-07City of Palo Alto City Manager’s Report TO: ATTN: FROM: DATE: SUBJECT: CITY MANAGER MAY 8, 2007 HONORABLE CITY COUNCIL POLICY AND SERVICES COMMITTEE DEPARTMENT: City Manager’s Office CMR:221:01 TRANSMITTAL OF REVISED DRAFT OF PROPOSED PUBLIC/PRIVATE PARTNERSHIP POLICY AND PROCEDURE RECOMMENDATION Staff recommends that the Policy and Services Committee review the revised policy and procedure 1-25 for public/private partnerships and make comments prior to recommending_ adoption to the City Council.- BACKGROUND Revisions to the policy and procedure for public/private partnerships (P&P 1-25) have been reviewed at the Policy and Services Committee meetings of June 13, 2006 and October 11, 2006, and the City Council meeting of January 16, 2007. At the February 13, 2007 Policy and Services Committee meeting, Council Member Barton suggested that re-formatting the policy to be more congruent with standard policies and procedures would be helpful: DISCUSSION The attached revisions reflect no substantive changes in the previously reviewed policy and procedure, only formatting. PREPARED BY Ricl~a~d James, Dire.Services CITY MANAGER APPROVAL Assistant Benest, City Manager Manager CMR: 221:07 Page 1 of 1 PUBLIC/PRIVATE PARTNERSHIPS Policy Statement The City of Palo Alto encourages the formation of public/private partnerships for the benefits the community receives. For the purposes of this policy, "public/private" also encompasses "public/non- profit" partnerships. This policy is not intended to address proposals for "privatization" of City- provided services. Any such proposals would be considered on a case-by-case basis and negotiated accordingly. Definitions Public/private partnership: A public/private partnership is an agreement between the City and a nonprofit or private organization to provide services or to assist in funding of public facilities and programs. Such partnerships may take various forms, including: Acceptance of or solicitation of service or facility proposals Facilitation of such proposals through the City’s regulatory process Waiver of City General Fund fees to help reduce project costs. Contributions of City matching funds for 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. Public/private partnerships typically fall into one of three categories: co-sponsorship, alliances or joint ventures. Co-Sponsorships: This is the most common type of public/private partnership. An organization furthers the mission of the City by supporting a City activity or program in conjunction with pursuit of that organization’s own mission or program. 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 and American Youth Soccer Organization’s use of space in a City facility to train referees. Co-sponsorships are entered into by staff and normally have no or minimal financial impact. Alliances: This type of public/private partnership involves organizations that have been created for the sole purpose of supporting a City program or an array of City programs. The organization does not expect to receive any direct financial benefit or to alter City policy and/or operations, but undertakes to work closely and cooperatively with staff to implement City goals. Alliance organizations include the Recreation Foundation, the Art Center Foundation (Project Look or Cultural Kaleidoscope), the Friends of the Children’s Theatre (the Magic Castle), the Library Foundation and the Friends of the Palo Alto Library (financial assistance with the renovation and expansion of the Children’s Library). Alliances are approved by the Council if there are any staffing or budgetary implications to the partnership. Joint Ventures: Like co-sponsorships, joint ventures involve organizations which have programs or missions independent of the City; this is in contrast to alliances, which involve organizations whose mission or programs operate in deference to City prioritization and programming. Joint ventures, in contrast to co-sponsorships, involve the City entering into a contractual relationship with the public or non-profit organization with both parties contributing to the partnership for their mutual benefit. Each joint venture is uniquely negotiated by the staff and approved by the City Council. Examples of Joint Ventures include TheatreWorks, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by older adult service provider, Avenidas. Procedures Initiation of partnerships: Public/private partnerships may be initiated in one of three ways: By staff: Staff identifies an opportunity for such a partnership and undertakes an informal or formal request for proposal process to identify partners. By Council: The City Council directs staff to work with a private or non-profit organization to develop such a partnership. ¯By a private or non-profit organization: An organization makes a partnership proposal to the staff or City. City Manager Review: If the partnership proposal involves more than one City department, the City Manager’s Office will appoint a team with representatives of all City departments who are stakeholders in the partnership proposal. The team will analyze the proposal and inform the City Manager of the resource implications of the proposal, including staffing and monetary commitments. This would include proposed fee waivers. If the proposal will require a re- ordering of department priorities that have already been approved by the Council in setting its annual priorities or in the budget process, Council approval will be required prior to commitment to the partnership. Council approval will also be required if the partnership requires a new or adjusted allocation of operating or capital funding. Note: Co-sponsorships usually only involve a single department and do not necessitate the formation of an interdepartmental committee, the involvement of the City Manager’s Office or the approval of the City Council. City-Initiated Partnerships: Such partnerships will be guided by existing policies and procedures governing purchasing and outsourcing, using "requests for proposals" and/or bid processes as the method of initiating a partnership. A City-initiated partnership may incorporate incentives including 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. Evaluation of Viability of Partnering Organization: Staff will provide the City Manager and/or City Council with its assessment of the viability of the proposed partnership, based on the partnering organization’s possession of sound organizational, administrative and fiscal management, and its demonstrated experience to achieve and sustain project tasks, such as fundraising and building community support. For proposed facility improvement or expansion initiatives, the non-profit or private organization should have the ability and commitment to make a. substantial pledge to the project’s cost. Facilities Proposals: If a City facility is to be renovated, exPanded or otherwise be directly affected by the partnership, the Infrastructure Management Plan wilt have to be adjusted appropriately. Long-term staffing, operational and maintenance costs must be identified in the proposal. The project’s applicable costs and funding sources for furnishings, fixtures and equipment will be identified. The parties will negotiate the joint or separate financial responsibility for any project cost overruns on a project-by-project basis. Staff may recommend that any standard 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 summary and recommendation in the report to the Council will include a staff recommendation on waiving fees which the Council can approve or reject. The City will determine whether the nonprofit or private organization shall use or may forego a formal or informal competitive selection process in the hiring of professionals who will perform the management, design and/or construction phases of the project. The City shall review and approve the requirements for and the performance of all phases of design, planning and construction work for the project. 3