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HomeMy WebLinkAboutStaff Report 2311-2309CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, October 28, 2024 Council Chambers & Hybrid 5:30 PM     Agenda Item     2.Nonprofit Relationships Study Session Staff Presentation, At Places Memo   City Council Staff Report From: City Manager Report Type: Study Session Lead Department: City Manager Meeting Date: October 28, 2024 Report #:2311-2309 TITLE Nonprofit Relationships Study Session RECOMMENDATION Council to receive a report and provide feedback on a framework for strengthening the City’s practices in nonprofit relationship engagement, funding, support, and evaluation, informed by 2022 Nonprofit Audit insights and recommendations. BACKGROUND In June 2022 the Policy and Services Committee received a report from the City Auditor focused on identifying risks related to nonprofit agreements and provided corresponding recommendations for improvement.1 Key recommendations included defining clear service level expectations and performance management and evaluation on all nonprofit and lease agreements, as well as quantifying non-monetary support to determine appropriate compensation for nonprofits’ use of City-owned properties. Recommendations are summarized in Attachment A. Through various agreements, the City engages with nonprofit organizations that support community needs and Council priorities. Agreements may be in the form of grants, professional or general services contracts or facility lease agreements. The City has an administrative policy on public-private partnerships that addresses some types of non-profit engagements, but the policy is neither comprehensive nor fully up to date with current City programs and practices. Guided by the audit recommendations, this study session seeks feedback from the Council on an approach to review and improve the City’s programs for nonprofit support that is paired with 1 June 14, 2022 Policy and Services Committee Meeting: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=6282&compileOutputType= 1 appropriate expectations, on both sides, for accountability measures that reflect the variety of relationships. ANALYSIS The City of Palo Alto provides high quality community services and programs to its residents through its many libraries, parks, community facilities, recreation programs, art and cultural centers, with special consideration for its vulnerable populations such as seniors, children, and people with disabilities. The City also relies on other public agencies and nonprofit partnerships to deliver community services that provide a public benefit, which would otherwise be more expensive or highly specialized for the City to offer. A table with current nonprofit service and lease agreements are included in Attachment B and C. Over the years, the paths through which nonprofit relationships have been formed and managed has varied given evolving community needs, organizational opportunities, Council priorities, and changes in City policies and processes. This has resulted in inconsistencies in the approach and management of nonprofit partnerships, such as the examples highlighted in the Nonprofit Audit Report. The audit findings provide an opportunity to refine this approach by establishing a framework based on overarching guiding principles and decision-making. As a method for considering and rationalizing the wide variety of City nonprofit support relationships and to organize decision-making going forward, staff has developed a conceptual framework to discretely describe and discuss how partnerships are developed and implemented. Our proposed discussion framework consists of a sequence of steps, including: •Principles – the fundamental goals and values that guide the establishment and pursuit of partnerships; •Practices – the policies and protocols, such as the use of Requests for Proposals, through which principles are implemented; and, •Products – the visible methods, such as defined funding programs and administrative policies, through which the principles and practices are implemented and communicated to nonprofit partners and the community at large. In concept, this sequence of Principles, Practices, and Products can be used to ensure that the City’s approach to pursuing prospective partnerships, decision-making, and administrative implementation are clear and consistent with their intended outcomes. This report provides a first attempt at applying this conceptual framework to reviewing our current partnerships and identifying areas for improvement that will guide decision-making into the future. The following graphic illustrates the proposed approach for this review: As a starting point for Council consideration, staff has reviewed prior actions and prepared a first draft set of principles that we believe reflect the City’s fundamental interests in establishing nonprofit partnerships. At the study session, staff will seek Council feedback on whether these Principles accurately reflect the City’s interests or should be revised or supplemented. Principles Guiding Non-Profit Partnerships: 1.Impact-oriented focus and accountability- Partnerships will identify intended outcomes and prioritize unmet needs, and incorporate appropriate measures and reporting, while reflecting the nature of the engagements and avoiding unnecessary administrative processes. 2.Service alignment- Programs and services should align with the Council's priorities and identified community needs. 3.Fairness and open access- The City will maintain visibility and consistency in its partnership processes, to both the nonprofit community and public at large. 4.Equity and inclusion- Resource allocations will consider and prioritize accessibility of the resulting services to all community members, with particular attention to underserved and vulnerable populations. 5.Flexibility for special circumstances- The City Council will need the ability to act quickly when needed to respond to special circumstances. While the Principles above are simply a draft, the following paragraphs provide examples of how the Principles can then be carried through our Practices and Products. As evident through the points that follow, identification of the City’s core Principles is an important first step. Principle 1: Impact oriented focus and accountability- Partnerships will identify intended outcomes and prioritize unmet needs, and incorporate appropriate measures and reporting, while reflecting the nature of the engagements and avoiding unnecessary administrative processes. The City ensures that the responsibilities of all parties reflect the nature of the engagement by promoting financial stewardship, managing risks to sustainability, and establishing measurable goals and oversight to maintain the effectiveness and accountability of nonprofit partnerships. Related Practices A. The significance of a partnership to both parties will be reflected in the City’s engagement on issues such as organizational and fiscal management A. Where needed to manage risk of the relationship and service delivery, the City may support resources for nonprofit training and organizational development B. Where possible, City funding should not be the primary source of a nonprofit’s budget. Where a major funder, the City may be involved in the nonprofit’s governance C. All agreements should include appropriate measurable goals and key performance indicators D. Policies should include guidelines for underperformance and corrective actions E. The City’s responsibilities in agreements should be clear and achievable to avoid noncompliance Related Products 1. HSRAP and CDBG grants already require regular financial reporting. Depending on significance to the nonprofit’s budget, other grants may also require ongoing and annual financial reports 2. Funding criteria states that City funding is leveraged and not significant source of organization’s budget 3. Consider designating a Council liaison to organizations where the City is a major funder 4. All grant program, direct grants, service, and lease agreements will include appropriate measurable goals and key performance indicators Principle 2: Service alignment- Programs and services should align with the Council priorities and identified community needs The City ensures that programs and services are aligned with Council priorities and evolving community needs by regularly evaluating organizations and making funding decisions based on their potential impact and capacity to deliver services. Related Practices A. Regularly evaluate current needs of the community, as well as services and organizations meeting these needs B. Funding decision are made based on alignment with Council priorities, potential for impact, and the nonprofit’s capacity to deliver services Related Products 1. A Human Services Needs Assessment is currently conducted to update funding criteria and priorities for HSRAP. Other needs assessments should be considered in order to inform other grant activities 2. The City may explicitly consider Council priorities, community surveys and needs assessments prior to making new funding decisions Principle 3: Fairness and open access- The City will maintain visibility and consistency in its partnership processes, to both the nonprofit community and public at large. The City is committed to maintaining transparency and equity in its partnership processes, ensuring clear communication, equitable access to resources, and consistent application of subsidies based on public benefit. Related Practices A. Periodically review overall nonprofit funding, as a precursor to new decisions B. Prior to significant funding decisions, broadly communicate the availability of funding C. When providing financial support, clearly communicate goals and expectations for how funding will be used D. Below-market rental of City facilities will be visible to all and periodically revisited E. Subsidies will be consistently applied and based on public benefit received F. Periodically review overall grant programs, direct funding, and below-market leases to ensure alignment with current goals, and direct program-level adjustments as appropriate Related Products 1. Develop a publicly-available summary and calendar of nonprofit funding opportunities 2. Annually report overall nonprofit funding and lease subsidies 3. Agreements with nonprofits for ongoing direct funding (outside of grant programs) will reflect a periodic review, in order to ensure continued alignment in the context of other available service providers Principle 4: Equity and inclusion- Resource allocations will consider and prioritize accessibility of the resulting services to all community members, with particular attention to underserved and vulnerable populations. The City is dedicated to ensuring that services and resources are accessible to all community members, especially underserved and vulnerable populations, by upholding high standards of transparency in decision-making, fostering inclusive practices, and engaging the community in continuous improvement efforts. Related Practices A. Maintain high standards of transparency in decision-making and award process B. Where appropriate, include boards and commissions in the review process C. Consider specific conflict of interest polices for disclosure of relationships with nonprofit applicants D. Solicit feedback after each funding cycle to identify areas for improvement and increase responsiveness to community needs Related Products 1. The HSRAP program will continue the Human Relations Commission’s role in making grant recommendations and presentation to the City Council 2. Consider requiring by policy that significant direct funding decisions be reviewed by applicable board or commission Principle 5: Flexibility for special circumstances- Council has the discretion to consider special circumstances Staff anticipates that the Council will want to retain the discretion to address special circumstances, whether unusual opportunities to take advantage of investments by others, time- critical needs, or others. This principle would be achieved by establishing clear procedures for awarding agreements or grants outside of standard processes and developing policies to manage one-off requests. Related Practices A. Identify circumstances and procedures through which agreements and/or grants are awarded outside of the established processes B. Requests that fall outside these circumstances would require more extensive review Related Products 1. Develop a policy for managing one-off requests 2. Create a Council emerging needs earmark within its contingency fund Staff would like the City Council to provide feedback on the overall guiding principles and structure in this report. Noting that additional funding strategies within each category could be defined. For example, Council may create a funding program for special events. Following Council discussion and feedback, staff will recommend appropriate policy adjustments and develop new processes and procedures as appropriate for Council consideration and where appropriate, adoption. Staff will also develop a stakeholder outreach strategy to inform and receive feedback from our nonprofit partners. FISCAL/RESOURCE IMPACT No additional resources are required to support the discussion outlined in this report; however, depending on Council feedback, additional resources may be required to support the planned Nonprofit Relationship review as well as any policy or management and oversight changes that may result. Departments that manage a significant amount of service agreements and nonprofits leases, such as the Community Services and Administrative Services Departments may be most affected. Follow-up work required may also impact resources, such as revising existing agreements and any related work such as appraisal services to determine market values. STAKEHOLDER ENGAGEMENT Following the City Council’s initial review and feedback, the City will engage with stakeholders especially the nonprofit community. Staff anticipates using this engagement to inform recommendations that would then return to Council. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA). CEQA Guidelines section 15378(b)(2). ATTACHMENTS Attachment A: Summary of 2022 Nonprofit Agreement Audit Recommendations Attachment B: FY 2025 Nonprofit Service Agreements Over $10K Attachment C: FY 2025 Nonprofit Lease Agreements APPROVED BY: Ed Shikada, City Manager ATTACHMENT A Summary of 2022 Nonprofit Agreement Risk Management Review Audit Recommendations #Audit Recommendations Summary Nonprofit Service Agreements 1.Agreements should define service level expectations: goals, performance measures, and reporting. Higher-risk agreements should have greater performance and reporting expectations. 2.High-risk agreements should be appropriately resourced and closely managed. Underperformance should be discussed early and corrective actions should be taken to improve performance. 3.City’s responsibilities in the agreement should be achievable to avoid noncompliance. 4.City should track and evaluate City /nonprofit performance and address risk of continuing or discontinuing the relationship. City should maintain a list of all nonprofit agreements and periodically report to Council on performance. Nonprofit Lease Agreements 1.Lease agreements with significantly reduced rent amounts should include performance and reporting requirements for services being provided on the premise. High-risk agreements should assign a project manager to monitor performance. The actual benefit to the City should serve as a basis for reduction of rent amount when lease agreements are renewed. 2.Analyze non-monetary support should be analyzed based on the ASD estimated fair market rental value + Analyze non-monetary benefits to be provided by nonprofit = to determine the appropriate compensation or their use of the City-owned properties. ATTACHMENT B Nonprofit Service Agreements of $10K or More, as of FY 2025 FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease*Date Amount HSRAP ‐ Disability services. Provides advocacy, inclusion, and independence for people with developmental disabilities and their families Community Services /Human Services1AbilityPath7/1/2023 6/30/2025 $150,474 $69,988 X X No HSRAP ‐ Employment opportunities for adults with developmental disabilities. Irrigation, maintenance, and reporting Community Services /Human Services2 3 Ada's Cafe 7/1/2023 6/30/2025 3/14/2027 $123,500 $57,442 $30,000 No NoActerra now Grassroots 3/14/2024 $30,000/yr Public Works HSRAP ‐ Services to lesbian, gay, bisexual, transgender, queer and questioning (LGBTQQ) youth and their straight allies Community Services /Human Services4 5 Adolescent Counseling Services ‐ Outlet 7/1/2023 7/1/2023 6/30/2025 6/30/2025 $107,500 $16,050 $50,000 $7,465 X No No HSRAP ‐ Adolescent substance addiction treatment program for Middle and High School studentsAdolescent Counseling Services ‐ ASAT Program Community Services /Human Services X X HSRAP ‐ Various program for low‐ income youth and seniorsAlta Housing (formerly Palo Alto Housing Corp) Community Services /Human Services6 7 8 9 7/1/2023 7/1/2020 12/7/2020 6/1/2024 6/30/2025 6/30/2025 6/30/2025 4/30/2025 $94,009 $2,687,018 $1,344,270 $22,500 $43,725 $570,453 $188,275 $22,500 No Yes No No Senior programs (formerly part of HSRAP)Community Services /Human ServicesAvenidas Urban forestry professional services, outreach, and educationCanopyPublic Works Fire Assist Fire Department in developing community‐driven 5‐Year Strategic Plan Center for Public Safety Excellence, Inc. HSRAP ‐Provide transportation to access in‐person therapy, basic food needs, and clinician recommended therapy supplies for families with children ages 5‐22 with Medi‐Cal Community Services /Human Services10 Children's Health Council 7/1/2023 6/30/2025 $16,665 $7,751 X No ATTACHMENT B FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease*Date Amount Workforce Development Program. Provide comprehensive support services for homeless/ unemployed to secure employment Planning & Development Services/CDBG 11 Downtown Streets 5/24/2023 1/12/2024 7/1/2023 6/30/2024 $168,340 $168,340 $176,136 $38,473 No Consists of 1) street cleaning services for the City’s five parking garages, sidewalks, and alleyways in the Downtown Palo Alto area funded by University Avenue Parking Permit Fund ($107,748/yr) 12 Downtown Streets Team 1/11/2027 6/30/2025 $528,409 $82,717 Public Works No No HSRAP ‐ Services to the homeless, including job skills training, work Community Services experience, and food for low‐income13 Downtown Streets Team X X /Human Services individuals through the Palo Alto Food Closet HSRAP ‐ Tutoring for low income middle school studentsCommunity Services /Human Services14 DreamCatchers 7/1/2023 9/3/2018 6/30/2025 $118,800 $70,000 $55,256 $70,000 No No Empowerment Institute assist City with advancement of community engagement block program15 Empowerment Institute 12/31/2021 City Manager Ambassador Program at Foothills Nature Preserve Habitat Restoration at Pearson Arastradero Preserve 16 Environmental Volunteers 17 Grassroots Ecology 18 Grassroots Ecology 19 Grassroots Ecology 9/30/2024 7/1/2024 10/1/2023 3/15/2024 6/30/2025 6/30/2029 9/30/2028 3/14/2027 $10,580 612,027 529,459 $90,000 $10,580 $115,475 $102,329 $90,000 Community Services Community Services Community Services No No No No Habitat restoration at Foothills Nature Preserve School outreach and creek monitoring PWD‐Watershed Protection HSRAP ‐ Meals on Wheels; fully‐ prepared mealsdelivered to vulnerable seniors Community Services/Human Services 20 Health Trust 7/1/2023 7/1/2023 6/30/2025 6/30/2025 $46,440 $86,950 $21,600 $40,442 X X No No HSRAP ‐ Winter shelter for women experiencing homelessnessCommunity Services /Human Services21 Heart & Home Collaborative ATTACHMENT B FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease*Date Amount Shelter staffing for the Overnight Warming Location (OWL)Community Services /Human Services22 Heart & Home Collaborative 1/1/2024 5/30/2024 $24,500 $24,500 No HSRAP ‐ Grief supportCommunity Services /Human Services23 Kara 24 Kara 7/1/2023 7/1/2024 6/30/2025 6/30/2027 $60,200 $24,900 $28,000 $8,300 X X No NoCISM Peer Support and TrainingFire HSRAP ‐ Distribution of education and essential item packages, and participation in a nature equity education camp for low‐income families living in RVs Community Services /Human Services25 Karat School Project 7/1/2023 6/30/2025 $29,031 $13,503 No HSRAP ‐ Nutrition program for persons 60 years of age or older.Community Services /Human Services26 La Comida 27 LifeMoves 28 LifeMoves 7/1/2023 7/1/2023 7/1/2023 6/30/2025 6/30/2025 6/30/2025 $129,000 $199,720 $460,000 $60,000 $92,893 $230,000 X X No No No HSRAP ‐ Food services for homeless and very low‐income Palo Alto residents Community Services /Human Services Homeless Outreach Services programCommunity Services /Human Services Opportunity Services Center. Provide comprehensive, one‐stop, multi‐ service day drop‐in center for critical homeless services Planning & Development Services/CDBG 29 LifeMoves 7/1/2023 7/1/2024 6/30/2024 6/30/2025 $23,636 $23,636 No No Provide adaptive programming for Community Serivces people of all abilities.Magical Bridge Foundataion $150,000 HSRAP ‐ Health services for low income, uninsured Palo Alto residentsRavenswood Family Health Center (MayView Clinic) Community Services /Human Services307/1/2019 7/1/2020 6/30/2025 6/30/2023 $161,250 $800,000 $75,000 X No NoCablecasting, production and streaming services31 MidPen Media Center $160,000 Administrative Services ATTACHMENT B FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease*Date Amount Neighbors Abroad provides administrative support to help with website communications, social media, finance and other admin responsibilities in relation to the City's (8) Sister Cities 32 Neighbors Abroad 9/30/2019 12/31/2021 $30,000 $30,000 City Manager No Management of City's childcare subsidy program (formerly part of HSRAP) Management of the City’s archives and facilitate public access to information and materials relating to City history Community Services /Human Services33 Palo Alto Community Child Care 7/1/2020 7/1/2024 6/30/2025 6/30/2025 $2,721,488 $43,000 $577,207 $43,000 Yes No34 Palo Alto Historical Association (PAHA)Library SRO Resident Support. Provide in‐ house SRO Service Coordinator for support counseling, employment assistance and crisis intervention Planning & Development Services/CDBG Alta Housing (formerly Palo Alto Housing Corp)35 7/1/2023 6/30/2024 $14,000 $14,000 No Alta Housing (formerly Palo Alto Housing Corp) Administration of the Below Market Rate program.36 37 5/19/2023 7/1/2023 6/30/2025 6/30/2026 $356,556 $178,278 $242,000 Planning No No Based on annual budget submitted Serving as Transportation Management Association for Palo Alto Palo Alto Transportation Management Association Transportation to Council Operating and Management 38 Pets In Need 4/1/2024 7/1/2023 3/31/2029 6/30/2025 7,373,516 $27,982 $1,370,000 Community Services Agreement to operate the Animal Shelter No No HSRAP ‐ On‐site support services for Parents and Advocates of Remarkable Children and Adults (PARCA) Community Services developmentally disabled adults living39$13,015 X X /Human Services in a residential program HSRAP ‐ Provide basic needs through community‐based services that target Community Services the immediate health needs of hard40 Peninsula Healthcare Connection 7/1/2023 6/30/2025 $83,332 $38,759 No/Human Services to reach individuals experiencing homelessness. ATTACHMENT B FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease Yes Date Amount Resource provider for youth and teen mental health Landlord‐Tenant Mediation Program (formerly part of HSRAP) 41 Project Safety Net 42 Project Sentinel 9/1/2020 7/1/2024 6/30/2025 $521,604 $100,000 Community Services Community Services /Human Services6/30/2027 $238,947 $79,649 No Fair Housing Services. Provide fair housing services including complaint investigation, counseling, advocacy and community education Planning & Development Services/CDBG 43 Project Sentinel 7/1/2023 6/30/2024 $18,000 $18,000 No HSRAP ‐ Legal Assistance to Elders44 Senior Adults League Assistance (SALA) 45 Silicon Valley Independent Living Center 46 Catholic Charities of Santa Clara 7/1/2023 7/1/2020 7/1/2023 6/30/2025 6/30/2021 6/30/2024 $44,075 $16,500 $10,000 $20,500 $16,500 $10,000 Services/Human X No No No Housing and Emergency Services. Assist low‐income individuals and families in search for affordable, accessible housing Planning & Development Services/CDBG Administration of the long‐term care ombudsman programDevelopment Prevent overdose‐related deaths in the city from the use of controlled substances by delivering harm reduction materials to individuals who are homeless or who are at risk of homeless and from referrals Planning & Development Services/CDBG 47 Peninsula Healthcare Connection 7/1/2023 7/1/2023 6/30/2024 6/30/2024 $10,000 $73,585 $10,000 $73,585 No No Create safe and healthy homes in Palo Alto allowing the most vulnerable homeowners, especially lower income households, seniors, and those with disabilities to remain in homes and communities Planning & Development Services/CDBG 48 Rebuilding Together Peninsula Medical oversight for ambulance transport services Facility agreements for use of Lucie Stern Theatre and payment of ticket surcharge to City ($4/ticket sold) 49 Stanford Hospital and Clinics 2/6/2020 7/1/2021 2/5/2022 $45,000 $50,000 $15,000 $50,000 Fire No NoTheatre Partner Agreements (West Bay50 6/30/2024 Community ServicesOpera, Palo Alto Players, TheatreWorks) ATTACHMENT B FY24 Contract Amount Current Contract Start DATE Contract End Total Contract Responsible DepartmentNo.Nonprofit Organization Name Purpose HSRAP Lease*Date Amount HSRAP ‐ Empowers individuals who are blind or visually impared to embrace life through evaluation, counceling, education and training Community Services/Human Services Vista Center for the Blind or Visually Impaired51 7/1/2023 7/1/2023 6/30/2025 $101,499 $47,209 $42,000 X No HSRAP ‐ Youth well‐being and leadership program services through community service projects Community Services/Human Services 52 Youth Community Services 53 YMCA of Silicon Valley 6/30/2025 $93,300 X X No HSRAP ‐ Senior fitness programming and financial assistance for senior memberships Community Services/Human Services 7/1/2023 7/1/2024 6/30/2025 6/30/2025 $21,500 $50,000 $10,000 $50,000 No No Youth Community Services (Youth 54 Connectedness Community Services Funding for the Youth Connectedness /Human Services InitiativeInitiative) *Identified nonprofit organizations with a lease agreement. ATTACHMENT C Nonprofit Lease Agreements as of FY 2025 A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Development and operation of a public garden center to provide horticultural classes and library, demonstration gardens, etc. Lease Start Date The Elizabeth Gamble Gardens Gamble Property 31‐Aug‐31‐Aug‐1 No 51 50 100,188 $ $ ‐ ‐ 1987 2038 Upgrade, maintain, and operate a public ice skating facility and ancillary services 26‐Jan‐ 19902 3 Community Skating, Inc. Dance Action Winter Lodge No No 1‐Jan‐ 2040 162,479 3,130 Office, dance studio, instruction and rehearsal uses 31‐Dec‐Cubberley Cubberley Cubberley Cubberley Cubberley Month to Month 1‐Jan‐ 2005 1‐Jan‐ 2005 1‐Jan‐ 2005 1‐Aug‐ 2005 1‐Oct‐ 2016 $ $ $ $ $ 63,9652009 Office, dance studio, instruction and rehearsal uses 31‐Dec‐4 5 6 7 Hua Kuang Reading Room Zohar 2006 No No No No Month to Month Month to Month Month to Month Month to Month 672 3,740 8,772 720 13,942 78,560 39,167 18,647 2009 Office, dance studio, instruction and rehearsal uses 31‐Dec‐ 2009 Office and child care uses The Children's Pre‐School Center 31‐Jul‐ 2009 Provide office and meeting space 31‐Dec‐California Pop Orchestra 2019 ATTACHMENT C A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Provide education to 9th through 12th grades Lease Start Date 31‐Dec‐8 Living Wisdom School Cubberley No Month to Month 1‐Oct‐ 2016 1,320 $34,1912019 Provide office and rehabilitation services for stroke survivors 31‐Dec‐9 Ability Path Cubberley No Month to Month 1‐Oct‐ 2016 3,000 $29,7112019 Provide office and meeting space Provide office and meeting space 31‐Dec‐10 Brainvyne Cubberley Cubberley Cubberley No No No Month to Month Month to Month Month to Month 1‐Nov‐ 2016 1‐Nov‐ 2016 1‐Dec‐ 2016 720 954 $ $ $ 18,647 24,714 30,717 2019 31‐Dec‐11 Palo Alto Soccer Club 12 Dance Magic 2019 Provide dance studio for dance education and performing arts 31‐Dec‐1,0082019 Provide multicultural and multilingual programing; Education and Instruction 31‐Dec‐13 Minority TV Cubberley Airport No No Month to Month 1‐Jan‐ 2017 1‐Jul‐ 2017 1,685 3,227 $ $ 17,9702017 Operate a flight training and ground school; Provide 30‐Jun‐ 202214 West Valley Flying Club 5 259,735 ATTACHMENT C A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Provide administrative services for all field program invention, advocacy, and education Lease Start Date 15‐Jul‐ 2020 14‐Jul‐ 202515 Palo Alto Humane Society Cubberley No Month to Month 400 $5,746 A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Years) Lease Start Date Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Airport Non‐monetary public benefits Operate a flight training and ground school; Provide commercial Aeronautical Activities (flight training, aircraft rental, facilitation 20‐May‐16 Stanford Flying Club No Month to Month N/A 530 $26,9822021 8‐Dec‐ 1978 1‐Jan‐ 2016 thereof) Provide a beneficial service to the youth and communityThe Stanford Area Council Boy Scouts of America17 Lucie Stern No No 50 10 7‐Dec‐ 2028 2,246 $‐ Offer memberships, classes, recreational activitiesPalo Alto Lawn Bowls 31‐Dec‐18 Palo Alto Lawn Bowls Club 70,000 $ $ 15,1282025 Operate a historical museum and a park open to publicMuseum of American Heritage Williams property 30‐Apr‐ 204319No25 40 1‐May‐ 2017 6,565 8,733 1 1 Perform the project by developing and operating a facility to house EV's offices and programs and to provide various educational and Sea Scout Base 23‐Oct‐ 2008 22‐Oct‐ 204820 Environment al Volunteers Yes $ training programs ATTACHMENT C A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Rent is waived in consideration of SUBLESSEE's Lease Start Date continued book and other Library sales which benefit and provide funds for Palo Alto Public Friends of Palo Alto Library (Ground Lease 2009)21 Cubberley Yes Yes Month to Month Month to Month 9‐Dec‐ 2009 8‐Dec‐ 2014 9‐Dec‐ 2015 5,000 $ $ ‐ ‐ Libraries Rent is waived in consideration of LESSEE's continued book and other Library sales and LESSEE's mission to provide funds for CityFriends of Palo Alto Library (Ground Lease 2010) 10‐Dec‐22 Cubberley 5,0002010Libraries Space for book storage,office space and book and other Library related salesFriends of Palo Alto Library (2012) 31‐Dec‐23 24 Cubberley Cubberley Yes Yes Month to Month Month to Month 6‐Nov‐ 2012 1‐Feb‐ 2017 2,496 345 $ $ 24,8302014 Space for book storage,office space and book and other Library related salesFriends of Palo Alto Library (2017) 31‐Dec‐3,3302019 Provide support services to organizations and individuals dedicated to youth wellbeing and suicide prevention. 26‐Oct‐ 2020 25‐Oct‐ 202525 PROJECT SAFETY NET Cubberley Downtown Yes Yes Month to Month 469 $ $ 1 Provide support services to older adults and their caregivers; a broad range of activities and services responsive to the interest and needs of26 Avenidas 50 1‐Jan‐ 2015 1‐Jan‐ 2065 17,400 1 senior citizens ATTACHMENT C A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Provide support services to older adults and their caregivers Lease Start Date 27 Avenidas H‐ 5 Cubberley Yes Yes Yes Month to Month 7‐Jul‐ 2020 6‐Jul‐ 2025 31‐Aug‐27 1,395 $ $ 23,963 17,950 ‐ Administration PA Alto support for benefits of providing quality theater work for the residents 28 Players‐ Peninsula Center Lucie Stern Ventura 3 1‐Jul‐ 2015 1‐Jul‐ 2016 500 Stage Provide child care related uses, services and activitiesPalo Alto Community Child Care 30‐Jun‐ 202829 30 31 Month to Month 21,000 $ Provide child care related uses, services and activities Palo Alto Community Child Care College Terrace 31‐Dec‐Yes Yes Month to Month 1‐Jul‐ 2016 1‐Jul‐23 2,000 $‐2028 Provide child care related uses, services and activitiesPalo Alto Community Child Care PAUSD 2 25‐Jul‐25 15,240 $86,126 Habitat restoration and maintenance services to and operating a native plant nursery 32 Acterra Foothills Park Lucie Stern No No 5 3 1‐Sep‐05 1‐Apr‐11 21‐Aug‐21 14‐Mar‐14 23,087 8,472 $ $ ‐ ‐ Provide for Girl Scout and certain other public activitiesGirl Scouts of Northern33California ATTACHMENT C A Separate Service Agreement Total Space Leased in Sq. Ft. B Current Lease Terms (Yrs) Lease End Date* Annual Rent (7/1/2024)No.Organization/Tenant Location Non‐monetary public benefits Construction and operation of Project HomeKey, an 88‐unit emergency temporary housing shelter Lease Start Date 34 LifeMoves LATP Yes 9 1‐Jul‐23 30‐Jun‐32 59,242 $1 Renovate the Roth Building and operate a historic museum 35 Palo Alto History Museum Ada's Café Roth Building Mitchell Park Cubberley No Yes No 40 12‐Dec‐22 6‐Dec‐19 1‐Oct‐16 31‐Dec‐62 5‐Dec‐24 31‐Dec‐19 17,784 $1 6,180 8,455 Employment opportunities for adults with developmental disabilities36 5 578 $ Classes, programs, and services for participants having cardiovascular disease and other medically‐related conditions 37 HeartFit for Life Month to Month 2,146 $ * Under the Holding Over provision, an expired lease continues on a month‐to‐month basis subject to all terms and conditions of the expired lease until the parties execute a written extension to the lease or lessee surrenders the property. October 28, 2024 www.cityofpaloalto.org Nonprofit Relationships Study Session 2 Purpose and Goal of Study Session That Council provide feedback on the overall guiding principles and structure for nonprofit relationships 3 Proposed Sequence of City Non-Profit Partnerships Review •City Goals •Identification of ResourcesPrinciples •Individual Council Actions •Administrative practicesPractices •Defined Funding Programs •Administrative Policies •CommunicationsProducts 4 Nonprofit Relationship Principles 1.Impact oriented focus and accountability 2.Service alignment 3.Fairness and open access 4.Equity and inclusion 5.Flexibility for special circumstances 5 Principle 1: Impact oriented focus and accountability Partnerships will identify intended outcomes and prioritize unmet needs, and incorporate appropriate measures and reporting, while reflecting the nature of the engagements and avoiding unnecessary administrative processes. Practice Examples: •City’s engagement on org. and fiscal management •Risk mitigation through training •City engagement in nonprofit governance •Measurable goals and performance measures •City’s responsibilities are clear and achievable •Guidelines for underperformance Product Examples: •Depending on significance to nonprofit’s budget, require ongoing annual reporting •Council liaison assigned to nonprofit governance where City is a major funder •Appropriate measurable goals and key performance indicators for all •City funding is leveraged and not significant financial source 6 Principle 2: Service alignment Programs and services should align with the Council's priorities and identified community needs Practice Examples: •Regularly evaluate community needs and supporting services and providers •Funding based on alignment with Council priorities, impact and nonprofit capacity to deliver services Product Examples: •Consider aligning Council priorities, community surveys and needs assessments prior to making new funding decisions 7 Principle 3: Fairness and open access The City will maintain visibility and consistency in its partnership processes, to both the nonprofit community and public at large Practice Examples: •Periodically review overall nonprofit funding and below market leases, as a precursor to new decisions •Broadly communicate funding availability •Financial reporting aligned with goals and expectations for funding use •Subsidies consistently applied based on public benefit Product Examples: •Develop publicly available summary and calendar of funding opportunities •Annually report overall nonprofit funding and lease subsidies •Agreements for ongoing direct funding (non-grant) will be periodically reviewed to ensure continued alignment in the context of other available service providers 8 Principle 4: Equity and inclusion Resource allocations will consider and prioritize accessibility of the resulting services to all community members, with particular attention to underserved and vulnerable populations Practice Examples: •Maintain high standards and transparency in decision-making and award process •Where appropriate, engage boards and commissions •Consider conflict of interest policies for disclosure of relationships with nonprofit applicants •Solicit feedback after each funding cycle Product Examples: •The HSRAP program will continue the Human Relations Commission’s role in grant recommendations to Council •Consider policy that significant direct funding decisions be reviewed by applicable board or commission 9 Principle 5: Flexibility for special circumstances Council has the discretion to consider special circumstances Practice Examples: •Identify circumstances and procedures through which agreements/grants are awarded outside of the established processes •Requests that fall outside these circumstances would require more extensive review Product Examples: •Develop a policy for managing one-off requests •Create a Council emerging needs earmark within its contingency fund 11 Proposed Engagement Process Following Council’s initial review and feedback, the City will engage with stakeholders, especially the nonprofit community. Staff will use nonprofit engagement to inform recommendations that will return to Council 11 That the Council provide feedback on the overall framework for strengthening the City’s practices in nonprofit relationship engagement, funding, support, and evaluation, informed by the 2022 Nonprofit audit Staff Recommendation Lupita Alamos, Assistant to the City Manager Kristen O’Kane, Community Services Director Lauren Lai, Chief Financial Officer October 28, 2024 Item No. 2. Page 1 of 1 City Council Supplemental Report From: Ed Shikada, City Manager Meeting Date: October 28, 2024 Item Number: 2 Report #:2410-3671 TITLE Nonprofit Relationships Study Session - Supplemental Report RECOMMENDATION Council to receive a report and provide feedback on a framework for strengthening the City’s practices in nonprofit relationship engagement, funding, support, and evaluation, informed by the 2022 Nonprofit Audit insights and recommendations. BACKGROUND Staff inadvertently included an incorrect link for the Public/Private Partnerships policy in the published staff report. The functional link is https://www.cityofpaloalto.org/files/assets/public/v/1/city-manager/misc/la/1-25-mgr-public- private-partnerships-8-07.pdf. APPROVED BY: Ed Shikada, City Manager POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 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/nonprofit” partnerships. 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. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 2 Joint Ventures: This type of partnership involves organizations which have programs or missions independent of the City and involve the City entering into a contractual relationship with the public or nonprofit 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 nonprofit organization to develop such a partnership. • By a private or nonprofit 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. POLICY AND PROCEDURES 1-25/MGR REVISED: AUGUST 2007 3 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 nonprofit 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 will 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.