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8.4 Arts and Humanities Programs CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. AGENDA SECTION NO: 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: ITEM NO. Page 1 Arts and Humanities 4 BY: BY: Connie Bonty ITEM: Resolution No. 09-6615 A resolution authorizing the Mayor to execute an agreement between the City of Salina and the Salina Arts and Humanities Foundation regarding responsibilities relating to Arts and Humanities Programming. BACKGROUND: The Salina Arts and Humanities Commission (A&H Commission), first formed by City Ordinance in 1966, consists of 12 members, appointed by the Mayor with the approval of the Board of City Commissioners. As amended and codified in Chapter 2, Article VII of the Salina City code, the A&H Commission is charged with (in somewhat abbreviated form): 1. Hold public meetings and keep a public written record of their proceedings 2. To review the financial needs of the program, and submit a proposed budget therefore to the City Manager 3. To make application for and accept grants, gifts and donations 4. To initiate, sponsors or conduct, alone or in cooperation with other public or private agencies, public programs to further the development and public awareness of, and interest in the fine and performing arts and the humanities, 5. To advise and assist the city in connection with other artistic and cultural activities as may be referred to it by the city. 6. To utilize the services of City staff who may be made available to it. 7. To serve as a clearinghouse for scheduling exhibits and other cultural events that occur in the community 8. To generally stimulate, facilitate, coordinate, and cooperate with existing arts organizations. In 1989, it was determined that it was desirable to establish a private, not-for-profit organization, to be styled the "Salina Arts and Humanities Foundation" (SAHF). The impetus for establish a separate entity was based on several factors including: 1. Establishing a donor comfort level that funds raised from the private sector for Arts and Humanities purposes would be used for those purposes. 2. Being able to maintain donor anonymity through a private foundation, when and if the donor prefers to remain anonymous. 3. Being able to meet performer's requirements regarding timing of payment and contractual disclosure limitations, specifically at River Festival. The City of Salina endorsed the formation of such a foundation via Resolution 89-4082. The Resolution cites the purposes of the Foundation as: "To initiate, sponsor or conduct, alone or in cooperation with other public or private agencies, public and private programs to further the development and public awareness of, and interest in, the fine and performing arts and the humanities; to advise and assist the City of Salina, Kansas, and it's agencies CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. AGENDA SECTION NO: 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: ITEM NO. 4 Page 2 BY: Connie Bonfy and instrumentalities in connection with artistic and cultural activities, to stimulate, facilitate, coordinate and cooperate with existing organizations, both public and private, and individuals for the development of the arts and historical tradition of the City of Salina, Kansas; and to initiate programs and proposals of encouragement for the promotion and development of the arts, culture, heritage, beauty and tradition of the City of Salina, Kansas." Arts and Humanities BY: The bylaws of the Salina Arts and Humanities Foundation provided that membership in the SAHF would be concomitant with the appointed membership of the Salina Arts and Humanities Commission. Clearly, there was a lot of overlap between the two organizations, with respect to both purpose and membership. In practice, the names "Arts and Humanities Commission" and "Arts and Humanities Foundation" are sometimes used interchangeably. While this arrangement insured unanimity of purpose, it also generated ambiguity with respect to the roles and responsibilities of the various parties. As a practical matter, this ambiguity gave rise to a mode of financing and operation in which the City of Salina budget provided for staffing costs, as well as an annual lump sum contribution to the "Foundation". The Foundation would raise private resources through donations, festival button Sales, vendor charges and fees, etc. The Foundation then combined those public and private resources, and incurred and paid all non-staff operating expenses associated with the various art and cultural programs, including the River Festival. City staff routinely acts on behalf of the Foundation in many respects, with no formal definition of the role they play in that capacity (up to and including signing of Foundation contracts). In short, the Arts and Humanities Foundation has been substantially involved in Arts and Humanities programming, well beyond a fiduciary role. With regard to meetings, the A&H Commission would meet to transact Commission business, adjourn as the Commission, and immediately convene as the Arts and Humanities Foundation to address Foundation business. In the recent past, this mode of operation has generated several issues revolving around the following points: 1. Public Records and Open Meetings requirements. It is the opinion of City legal counsel that, due to the overlap in membership between the Commission and the Foundation, and the lack of definition in the roles that staff play, that the Foundation is subject to statutory requirements regarding public meetings and open records. This makes it difficult, if not impossible to protect the anonymity of donors or comply with non-disclosure requirements in performance contracts. 2. Risk Management. The question of who provided coverage for personal and property damages that may occur at Foundation provided events is difficult to address. 3. Purchasing Authority. The legal authority of City employees to purchase goods and services, sign contracts, and the like on behalf of the foundation is unclear. Are the purchasing practices of the Foundation subject to the City purchasing policy? CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. AGENDA SECTION NO: 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: ITEM NO. 4 Page 3 BY: Connie Bonfy As a result of these issues, the Salina Arts and Humanities Foundation Board and City staff have spent considerable time in developing a new approach that will better achieve our goals and more appropriately define the roles and responsibilities of the various parties involved. Arts and Humanities BY: The new approach involves two components: a bylaws change for the Foundation which changes the way Directors are appointed, and the establishment of an agreement with the City of Salina establishing responsibilities of the two parties. Bvlaws chanqe: While there are multiple changes to the bylaws, only two of those have a direct impact on the relationship between the City of Salina and the Salina Arts and Humanities Foundation. The first change is a provision with regard to qualifications specifying that Foundation Directors cannot be either current employees of the City or current Commissioners of the Arts and Humanities Commission. The second change is that the new Directors are elected by the sitting Board of Directors, as is the case in many private foundations. These changes effectively sever the direct link between the Arts and Humanities Commission (appointed by the Mayor), and the Arts and Humanities Foundation. No City Commission action is required to implement the bylaws change-that has already been approved by the Foundation Board of Directors. The City - Foundation Aqreement: The agreement defines respective roles and expectations of the parties. Under the agreement, the City of Salina, through the Arts and Humanities Department and with the advice of the Salina Arts and Humanities Commission, will be responsible for program operations. This will include developing, budgeting, administering, and accounting for all programmatic aspects of the Arts and Humanities program. The City Finance Department will establish two financial accounting funds to account for the Smoky Hill River Festival, and the General Arts and Humanities programs. Revenues for the programs will include a transfer from the City General Fund, in an amount required to cover salaries and benefits plus normal office and staff support expenses. Other revenues will include Button sales, market fees, jury fees, food fees, other event tickets, etc. The City will not receive donations or contributions directly from private donors for the programs. The City may and likely will request funding from the foundation for those programs that the foundation has elected to support. Examples would include the Horizons program, Arts in Education, or other programs as determined appropriate by the Foundation Board. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. AGENDA SECTION NO: 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: ITEM NO. 4 Page 4 BY: Connie Bonfy The responsibilities of the Salina Arts and Humanities foundation are limited to: 1. Private fundraising 2. Investing Foundation Funds held on Account 3. Entering into private contracts with artists for the Smoky Hill River Festival, the payment for which shall be made by SAHF 4. Allocating and granting private funds to the City for programs which may be approved from time to time. Arts and Humanities BY: City staff may provide support to the Foundation that is incidental to their role as City employees. The Foundation may utilize meeting space at 211 West Iron, as well as maintain their private books of account at that location, to be kept separately from the City records. Each party is responsible for their own risk exposures. Finally, fiduciary assets (investments, checking accounts) currently owned by the Salina Arts and Humanities Foundation shall remain the property of the Foundation. The art collection currently owned and catalogued by the foundation will also remain the property of the Foundation. All other tangible personal property will be transferred to the City to be used in implementing the Arts and Humanities programs. FISCAL NOTE: We anticipate doing a budget amendment in conjunction with our normal budget process in order to accommodate these changes. The effective date of the agreement is August 1, so the budget for 2009 will be pro-rated for each of the programs. The City Arts & Humanities Department budget for 2009 is $414,449, all of which is provided by General Fund resources (largely property and sales tax revenues) As noted earlier, under the proposed arrangement, two funds will be established, one for general Arts and Humanities programs, and a separate fund for the Smoky Hill River Festival. The proposed approximate annualized budget for the Arts and Humanities fund will be as follows: Revenues: Transfer from the General Fund: Portion of Carryover Transfer from the River Festival: Arts and Humanities Foundation: Program Services Charges Grants and Misc. Total: $ 414,449 $ 34,235 $ 57,380 (based on the prior years experience) $ 41,285 $ 26,950 $ 12,750 $ 587,049 AGENDA SECTION NO: ITEM NO. 4 Page 5 Expenses (by Program): General Program Support: Poetry Series Art a la Carte Arts in Education Community Building Grass Roots Initiative Calendar and Web Horizons Long Term Planning Total: CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: Arts and Humanities BY: BY: Connie Bonfy $ 409,749 $ 10,250 $ 4,900 $ 48,550 (two semesters) $ 9,000 $ 2,000 $ 800 $100,800 $ 1 ,000 $ 587,049 The Smoky Hill River Festival Fund Budget will be approximately: Revenues: Foundation Support: Button Sales: Four Rivers Market fees Artist Fees Food Fees State Grants Miscellaneous Total: Expenses: General Administration Marketing Technical Staging Programming Transfer to A&H Fund Total Expenses: Total for Both Funds: $ 19,219 $ 159,500 $ 17,000 $ 24,000 $ 49,000 $ 7,120 $ 54,111 $ 329,950 $ 32,630 $ 85,440 $ 47,1 00 $ 32,200 $ 75,200 $ 57,380 $ 329,950 $ 916,999 The budget for the River Festival Fund does not include entertainment, as that is handled by the Foundation. These budgets are approximated, because the budgeting process for 2010 has just been initiated, and it will not be completed until August. This agreement will have the effect of increasing both City expenditures and revenues by about $502,550, as well as adding two additional operating funds. It will reduce the transaction volumes for the Foundation, and will funnel those transactions through the City accounting system. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE 04/06/2009 TIME 4:00 P.M. AGENDA SECTION NO: 8 ORIGINATING DEPARTMENT: APPROVED FOR AGENDA: ITEM NO. Page 6 Arts and Humanities 4 BY: BY: Connie Bonfy CONFORMANCE WITH THE STRATEGIC PLAN: The Big Ideas-Salina's Cultural Plan 2008-2013 include the following goals: . Make arts, culture, and heritage offerings welcoming, affordable and accessible to all Salinans; . Make our community a more beautiful place to live, work, and visit; . Use the arts, culture, and heritage as an engine to drive economic development, and downtown & community revitalization; . Make Salina a model community for cultural sector coordination, unity and support; . Guide Salina's cultural development with enthusiasm, skill, excitement, and vigor. The goals will be furthered by the division between foundation and city structure. As a fiduciary board, the foundation board will be able to focus solely upon its development and to build its funding base and grow its ability to respond to community need. COMMISSION ACTION: 1. Approve the agreement. Staff feels that it achieves the desired objectives with respect to public meetings and open records, while preserving privacy concerns in those cases where it is required. In addition, purchasing authority and staff and organizational roles are clarified as are ambiguities regarding risk exposures and insurance coverage required. 2. Take other such action as the City Commission may desire AGREEMENT BETWEEN THE CITY OF SALINA, KANSAS and SALINA ARTS AND HUMANITIES FOUNDATION regarding RESPONSIBILITIES RELATING TO ARTS AND HUMANITIES PROGRAMMING This Agreement is entered into this _ day of April, 2009, by and between the City of Salina, Kansas, a Kansas municipality, ("City") and Salina Arts and Humanities Foundation, a Kansas not-for-profit corporation, ("SAHF"). Recitals A. The City, upon the recommendation of the Salina Arts and Humanities Commission ("SAHC") and under the administration of its Arts and Humanities Department, annually undertakes a vigorous arts and humanities program for the purpose of identification, exploration, and development of this area's sense of community, heritage and vision through the use of artistic and cultural resources, including the annual Smoky Hill River Festival (the "Arts and Humanities Program"). B. The SAHC was established, organized, and empowered by the City in 1966, as currently set forth in Article VII, Chapter 2 of the Salina Code. C. The SAHF, organized in 1989 as a Kansas not-for-profit corporation and operated solely for charitable and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, as amended, serves as a "supporting organization" by promoting the use of private resources in support of the Arts and Humanities Program. D. The City's Governing Body, the SAHC, and the SAHF Board of Directors desire to clarify and define their respective roles in developing, funding, and administering the Arts and Humanities Program. The parties therefore agree: 1. Responsibilities of City and SAHC. The City (with the benefit of the work of the SAHC) shall, in relation to the Arts and Humanities Program, be responsible for developing, budgeting, determining levels of public funding, administering, and financially accounting for all program aspects of the Arts and Humanities Program, including the creation of a special fund account known as "The Smoky Hill River Festival Account" for purposes of administering and financially accounting for the City's programming role in conducting the Smoky Hill River Festival. 2. Responsibilities of SAHF. SAHF shall, III private support of the Arts and Humanities Program, be responsible for: (a). Private fundraising; (b). Investing SAHF funds held on account; (c). Entering into private contracts with artists for the Smoky Hill River Festival, the payment for which shall be made directly by SAHF; and (d). Allocating and granting private funds to the City. The City acknowledges that SAHF may utilize the services of the Greater Salina Community Foundation in fulfilling its responsibilities under this Agreement. 3. Allocation of Assets. The SAHF fiduciary assets shall remain the property of the SAHF. The current Smoky Hill River Festival art collection shall be the property of the SAHF. All other tangible personal property utilized in implementing the Arts and Humanities Program shall be the property of the City. 4. Staff Support. Incidental to their primary staff roles as employees of the City, Arts and Humanities Department staff shall from time to time be called upon by the City to assist SAHF directors and other SAHF volunteers in support of the private work of the SAHF; provided, however, under no circumstances shall any authority of the SAHF or its officers or directors be delegated to or exercised by a city employee. Any city employee directed to assist the private work of the SAHF shall at all such times and for all purposes be an employee of the City and not the SAHF. A city employee shall not serve as a director or officer of the SAHF. 5. Meeting Space. Meeting space and work areas required from time to time for the private work of the SAHF board of directors and other SAHF volunteers shall be made available in the offices of the Arts and Humanities Department of the City, currently located at 211 West Iron Avenue. 6. Insurance. The City and SAHF shall each evaluate its own insurable risks and determine the insurance coverages it chooses to acquire in its own discretion and at its own expense. 7. Bookkeeping and Records. The books and records of the SAHF maintained in the offices of the Department, regardless of format, shall: (a) SAHF; Be owned by SAHF and maintained as the confidential private records of (b) Relate only to the private actIvItIes of SAHF in fulfilling its responsibilities outlined in Paragraph 2 above in private support of the Arts and Humanities Program; and 2 (c) Be stored separately from the books and records of the City and accessed by city employees only when authorized and acting in the role of supporting the private work of the SAHF as described in Paragraph 3 above. Any books or records relating to SAHF funds after such funds have been allocated, granted, and transferred by the SAHF to the City for City use in administering the Arts and Humanities Program shall be a public record. 8. Audit. The City and SAHF shall each be responsible for its separate and independent annual financial audit. 9. Anniversary Date. The Anniversary Date of this agreement shall be January 1st. 10. Term. The implementation date of this Agreement shall be August 1,2009. This Agreement shall remain in effect until it is either (a) modified by mutual written agreement of the parties at any time or (b) terminated by either party effective on any Anniversary Date upon written notice by the terminating party to the City Clerk (on behalf of the City) or the SAHF board chair (on behalf of SAHF) on or before the preceding June 1st. 11. Non-assignable, Binding Effect. Due to the unique qualifications and circumstances of the parties, neither the rights nor the responsibilities provided for under this Agreement shall be assignable by either party in whole or in part. This Agreement shall be binding upon any successor to either party. Executed by the duly authorized officers of the parties as of the date first above written. CITY OF SALINA, KANSAS By: John K. Vanier II, Mayor ATTEST: By: Lieu Ann Elsey, CMC, City Clerk SALINA ARTS AND HUMANITIES COMMISSION By: Peggy DeBey, Board Chair ATTEST: By: Rachel Loersch, Board Secretary 3