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HomeMy WebLinkAboutStaff Report 360-06TO: City of Palo Alto City Manager’s Report POLICY AND SERVICES COMMITTEE FROM:CITY MANAGER DEPARTMENT: COMMUNITY SERVICES DATE: SUBJECT: OCTOBER 11, 2006 TRANSMITTAL OF SECOND DRAFT CMR: 360:06 PUBLIC/PRIVATE PARTNERSHIP POLICY RECOMMENDATION Staff requests that the Policy and Services Committee reviews and approves the attached update (Attachment A) to the City’s Public Private Partnership policy. BACKGROUND At the April 26, 2006 Policy and. Services Committee meeting, staff received direction and comments to update the existing Public Private Partnership policy. A draft of the revised policy was presented to the Policy and Services Committee at its June 13, 2006 meeting (Attachment B). The consensus from the Committee was that the policy draft should be simplified, be more positive in its tone, and that guidelines would be helpful to help. the public understand thb procedures involved. This report transmits staff’s work on the policy draft and requests input and approval from the Committee. RESOURCE IMPACT PuNic/private partnerships can be beneficial by providing a way to leverage City funds, 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. ATTACHMENTS Attachment A: 8/30/2006 Draft Public Private Partnership Policy Attachment B: 6/5/2006 Draft Pu(,lal’ _a~ate Policy PREPARED/APPROVED BY:~.. CITY MANAGER APPROVAL: HARRISON Assistant City Manager CMR:360:06 Page 1 of 1 DRAFT 8/30/06 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 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. 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 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 upgrades and examples 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’s 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. Exalnples include Theatre Works, Palo Alto Players and West Bay Opera’s use of the Community Theatre and use of the former police station by senior 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 otherbenefit. 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 use of space in a City facility to train referees, and the Palo Alto Recreation Foundation’s use of the Lucie Stern Center to present the Palo Alto Black and White B all. Guidelines: The following guidelines enable the City to respond promptly and comprehensively to proposals for a public/private partnership. Proposals are generally initiated 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 organization will jointly determine the specific terms and outcome of a project or activity. Because of government procuring and labor requirements, City staff will implement most projects and activities unless special arrangements have been made with the 2 partnering organization to provide in-kind services or management of a specified proj ect. 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 partnering organization should be prepared to make a substantial COlnlnitment to the proposed project’s cost. Projects with a higher level of outside funding may be more favorably received. Additionally, 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 Proposal 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 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 needed, the City Manager or his designee will convene an ad hoc committee of representatives from departments affected by the proposal to evaluate it and make a recommendation. 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. [] An option to lease or license a facility for the facilitation of pro-bono or other cost-cutting opportunities is requested. []Memorandums of agreement are necessary for projects that are complex in nature or that may take place over an extended time period. ¯Should staff deny a Joint Venture request, the requesting party may appeal the decision to the Council’s Finance Committee. ¯Each department that incorporates co-sponsorships into its program will develop guidelines for the initiation and maintenance of co-sponsorships. These guidelines will be approved by the City Manager under the Administrative Regulations Policy which provides for review by the City Council. 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 4 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 recommendation on waiving fees, excepting Utilities and other Enterprise-related fees, which the Council can approve or reject. Attachment B DRAFT 6i5/2 ) )6 PUBLIC PRIVATE PARTNERSHIPS POLICY STATEMENT It is the policy of the City of Palo Alto to encourage the development of public/private partnerships for the benefit of the public. A public/private partnership is defined as a formal cooperation between the City and the private sector, including but not limited to nonprofit organizations, in providing services and/or capital facilities and projects to the community. It is the intent of this policy to encourage and promote the City’s active participation in the formation of such partnerships. Under this policy the three types of public/private partnerships are Joint Ventures, Alliances and Co-sponsorships. These are defined, as follows: Joint Venture: Where an individual, business, or agency enters into a contractual relationship with the City and the parties agree to collaborate on a project or activity. Both entities contribute to the partnership to their mutual benefit. Examples here would include the Historic Museum’s lease of the Roth building, the Environmental Volunteers improvements to the Sea Scout building, the Avenidas senior program, and Palo Alto Community Child Care. Alliances: Where an organization invests in one or more City activities, programs and facilities, either through contribution of funds or rendering of in-kind services, and does not expect any direct benefit in return. The organization’s mission is to support the activities, programs and facilities of the City and work directly with staff to determine how best to help meet the City’s goals. Examples of Alliances include Friends of the Children’s Theater funding and building the Magic Castle theatre, Friends of the Parks funding for Heritage Park amenities, Friends of the Library support of library collections, and the Art Center Foundation’s ongoing funding for Project Look. Attachment B Co-sponsorships: Where an organization supports the City’s activities and programs by providing services that further the mission of the City in consideration of the provision of in-kind or other promotional benefits. Examples of these include the Palo Alto Tennis Club, Neighbor’s Abroad, AYSO, and the Palo Alto Run Club. City Role in Partnership Formation Historically, the City has been primarily a passive recipient of proposals for public/private partnerships. It is the intent of this policy to now promote the City’s proactive participation in the formation of such partnerships. "Proactive participation" could include: Facilitation of proposals through the City’s regulatory process. Solicitation of proposals for joint ventures. Waiver of fees (See section entitled "Fee Waiver") Contributions of City funds for construction of facilities to be owned and controlled or operated by the City. Use of facilities without charge or permitted use under a subsidized rent arrangement. Guidelines Proposals for a public/private partnership opportunity are normally received by City staff from the private sector, including nonprofit organizations. They may also be received by Council referral to staff for its review and recommendation. An important aspect of all public/private partnerships is the ability of the City to respond promptly and comprehensively to a proposal. Also of importance is the potential impact of the City’s fees for any activity, program or facility. The following guidelines establish the mechanism by which the prompt and comprehensive City review of proposals are obtained, the consideration of requests for Attachment B waiver of the City’s fees is given, and the streamlined process for Alliances that directly support City goals is conducted. Joint Ventul"es: A Joint Venture can be initiated in one of two ways. One is when a private sector entity approaches the City with a proposal for a project or program that it would like to initiate. The other is when the City actively initiates a search for a Joint Venture partner to consider a project or program. Joint Venture proposal will be reviewed using the following guidelines: All Joint Venture proposals will be reviewed by a staff committee convened by the City Manager or his designee. (See section on "Staff Review) City staff will request approval of Council only after staff first determines that the project has merit and sufficient benefit redounds to the City to wan’ant further review by the Council. Should staff deny the Joint Venture request, the requesting party may appeal the decision to the Council’s Finance Committee. Organizations should possess and demonstrate sound organizational, administrative and fiscal management. The requestor should also have the experience to achieve and sustain project tasks, such as fund raising and building community support. For facility improvement or expansion initiatives, the organization should be prepared to commit 50% to 100% of the necessary funding for the proposed project. Projects with a higher level of outside funding will be met more favorably. Should the project incur cost overruns, the City and private industry entity shall share costs at the ratio of funding commitment. For facility improvement projects, long-term staffing, operations and maintenance costs must be addressed in the proposal. If appropriate to the project, costs and funding sources for furniture, fixtures and equipment must be identified. Attachment B o Should the Joint Venture be approved, scheduling of the project will be determined by the Council with staff input and be made contingent on existing project schedules and staffing capacity. A City-initiated Joint Venture may include incentives offered to the other entity, including, for example, naming rights, waiver of building and planning fees, reduced lease rates, subsidies, and staff resources. All incentives may be negotiated on a case-by- case basis. Alliances: An Alliance takes place when an individual or organization provides financial or in-kind assistance to the City to achieve a stated City goal without any expectation of direct benefit. Consequently, it is appropriate for City staff and the Alliance organization to jointly determine the specific terms of a project or activity, and carry out those projects and activities, except when unbudgeted City funds or resources are required. In the event City funds and/or resources are needed, the Council’s prior approval will be necessary and may be contingent upon the use of specific funding sources (e.g.: development impact fees, Infrastructure Reserve, General Fund), the negotiation of an option to lease or license facilities for the facilitation of pro-bono or other cost-cutting opportunities, and the negotiation of memorandums of agreements that set guidelines for projects that are complex in nature or that may take place over an extended time period. Co-sponsorships: Co-sponsorships can take the form of one-time events or annual agreements with organizations whose activities are deemed to further the mission of the City. Each department incorporating co-sponsorships in its program will develop administrative regulations that specify the guidelines for the initiation and maintenance of co-sponsorships. These regulations will be approved by the City Manager before they are reviewed by the Council. Staff Review On an ad-hoc basis, the City Manager or his designee will assemble a staff committee to review all Joint Venture and Alliance proposals that impact City resources. Pros and Attachment B cons of a proposal will be identified and discussed. If staff determines the proposal has merit, the proposal will be forwarded to the C!ty Council with a recommendation by the City Manager concerning participation. 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 normal 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 shall 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 recommendation on waiving fees, excepting Utilities and other enterprise-related fees, which the Council can approve or reject.