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HomeMy WebLinkAbout2007-12-10 08-038 ORDERCOUNCILACIIDN Rem Ro.08 038 Dabs: 12-10-07 Item/Subject: Order, Authorizing Me City Manager M Enter Into an Agreement with the Coud Foundation— HammoM Street Senor Center Responsible Department City Manager Consonants": The Hammond Street Senior Center was establish by Me Coun foundation approo inavely ten years ago. The ftundMbn's pdrldpal, John Could, Is planning to retire wdhin Me rent four to five years and a seeking to partner with the City to Insure the continued operetmn of the Center. He has suggested Mat a new non-profit entity be formed with toad representation appointed by the City and Me Foundation. Opemthrg support would come from cement sources along with annual grants from the City and the Foundation, with esu vanteed aithough declining foundatba funding through 2020. A City famed committee reviewed! this proposal and remmmende lMat counterproposal to the Fauna tisn that woud albw Por Involvement of ober internted parties, najust the City, in the nen entity. A copyof the Ccmmrt[ee's report Is attaches. Subsequently, the Council met in a workshop to cls uss the Coun proposal and the Committee report and included its Beare to attest Me Couri proWsal in pntxipte while remgnlvng the nee] to work out Me details prior W Morning the new entity. A proposal was forwarded to Mr. Court Mata working group be appointed to begin the transition process with the understanding Mat Mis group would became the Boad ofany newly created! entity. This appreah allows for exploring all options M ure Me Ceraersfirture suuess. SfaathenmetwiMMr.0 d,wM pporte isaWrro hbutindimted Met he would need some form of agreement With the City for Could Foundation's Bwrd to approve. The attached! agreenmt was subsequent/negotiated. Under the Agreanent, a Committee of eight wild be formed with three appointee by the City, three by Me Foundation, and two Jointly selected from the Centers rrmnbes. [twill be dlarged vont developing a lon l - term bosiness pan for the Center and recommending the eventual structure of Me entity Mat wtil M barred. A final report will be presented by Febauary 1, 2010 for review and approval "a City and Foundation, with the new entity M be In place by January 1, 2011. The Foundation will contribute $100,000 annually from 2011 through 2015 and $50,000 annually thereafter through 2020. The City will be wooded, subject to annual Council appropriation, to make a contritW on toward the Center's operating sleeYalls In Me amounts as estr atel in the approval Mal report of Me Committee. Department Head Managers Consonants: Finance has reviewetl and recommends approval^y ytpenda/l1�z City Manager moriated Information: ww�...HH�•.. Flnante Director Legal Approval: 44eCity SolitlMr X passage first Reading Page_ of _ Referral (i8 G38 ARl]t immunciior ae=riugcao Ucc®De= 10. 7009 CITY OF BANGOR (TITLE.) ORDER, AuMOHZIng the Cory Manager to Enter into an Agreement with the Court Foundation — Hammond Street Senior Center. BE 1T ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT The City Manager is hereby autt orizecl to enter into an agreement with the Couri Foundation, in a form substantially as attached hereto, for the purpose of enwnng the continued operation of the Hammond Street Senior Center. ] MW EONMfSL 0ecmher 10. 2007 Notion Made and seconded for Passage Passed �BPOT4�©.gRB �� R 08-038 ([MAJ Authorieiae the City Manager to Hater into A e Aereeaeateith The Couri Fonndatian i t ' 08 038 AGREEMENT made this _day ofDecvnber 2007 by and between COURI FOUNDATION, INC., a Maine nonprofit corporation with amziling address of 748 Danbury Rood, Ridgefield, Connecticut 06877 ("the Foundation'l and CITY OF BANGOR abody corpnmU and pohtic C'Cityy. RECpfALS A. The Foundation, since has owned and operated a nonprofit business known as the"Hammond Street Serum Center" (the "Center') providing services to satior citizens throughout the greater Bangor, Maine area. The Foundation owns the Center's facilities lhatarelomtedon Hammond Street,Bangor,Maine. The Centerprovides significant educational, fitness, social, health awareness, and other services beneficial and vital to its members and which promote a more Abrand productive, and independent senior population within the Bangor, Maine area B. The Foundation has requested that the City anter into an agreement to help assure the continued operation of the Center beyond January 1, 2011, and the City bas determined, consistent with its obligations to senior citizens and for the betterment of the City, to doso. nue Foundation shall continue to have full opermonsl authority and control of me Ceruerunfil January 1, 2011. C. This Agreement ons form an outline of the understanding of the parties as of the date of this agreement with respect to the continued operation of the Center, its govemmoe, financing, and the nature of the services it may or shall provide to its members in the future. NOW, THEREFORE, for valid consideration, the parties bureau agree as follows: 1. The City and the Foundation shall together fomr a comminee(the"Committee to undertake the responsibilities set forth hereinafter and those that the Committee may dchumine to be appropriate. The Committee shall be comprised ofeight members, Rase of whom shall be appointed by the Foundation, face of whom shell be appointed by the City, and two of whom shall be selected jointly by the Foundation and the City from among members of the Center. All selections shall hatreds prior to February 1, 2008, and the Committee shall commence to function on thatdate. Any vacancies occurring on the Committee shall be filled by the party that originally appointed the Committee member whose position becomes vacant or by the parties jointly if the sector position was occupied by a member of the Center. The Committee manber shall save without compensation. Thetermsofmc Commiucemembers appointed by the City and the Foundation shall be three (3) years, and the tern ofthe Committee Members appointadjointly by the Committee and the City shall be one (1) year. Prim to June 1, 2008, the Committee shall devise a governance macrame for its operation, such structure to be approved by both the Foundation and the City prim to its implementation. 2. Among the responsibilities to be pMOrned by the Conmuaee are the following new" .I<09[dMc(o Developing a long -tern business plan for the Center for the period 2011 through 20M and thereafter (the `Plarming Period'9. Preparing a financial analysis of me Canter to include pro forma budgets, sources of income and anticipated expenses, an analysis offimdmising events and activifies that may be continued or initiated, the possible imposition of annual membership fees or classes of membership, and such other matters as the Committee may determine we appropriate. Recommending the eventual structure of the unity that is intended to take ova the operation of the Center, which maybe an operating foundation, a public charity, or in sone other Anne, including the possible renaming of the Cent". Determining the nature and extent of activities and services to be provided by the Cent". 3. The Committee shall report in writing In the Foundation and in the City on quarterly basis or as requested by the Foundation or We City. It is the imenfion of the paries that a final repart fiom the Committee shalt be delivered to the City and the Foundation on or before Febraaryl,2010(the"Firm)Report'). Thisreportmustbeapprovedbyamajomyofthe Commitee and separate majorities of the respective appointees of the Foundation and the City. The Foundation and the City shall each, within sixty days of the receipt of the Report, identify any issues found to be unacceptable or requiring amsdment. If stub issues are identified and communicated in writing to the other party, good faith negotiations shall commence to resolve them. The Final Report, including such changes as are mutually acceptable to the parties, shall be subject in the approval of both the Foundation and the City on or before July 1, 2010. 4. If the Final Report is approved by the Foundation and the City as provided herein, it is the intention of the parties that, a January 1, 2011, the Foundation shall transfer all assets owned by it and utilized in the conduct of the Camara busineas, fire and clear of any and all liens and scurnbmnces other than those real estate title encumbrances which do not materially chart the ownership, use, or operation of the real estate for its intended purpose, to the entity that shall be f rm d Forward to the approved Final Repoli. It is anti©pated that Commitee members in place as of the date the Final Report is submitted shall save as the initial governing body of the entity so created and that the governing body, for at least the itmial ten (10) year pound, shall be comprised of an equal number of persons chosen by the qty and chosen by the Foundation together with the number of Cent" members called for in the approved Final Report. 5. Between the date hereof and December 31, 2010, the Foundation shall continme to own, operate, and support the Cat". If the Final Report is sot approved by both the City and the Foundation, then the Foundation shall continue to own the Comm and may do with it what the Foundation deems appropriate. 6. Subject to the wines of this Agreement and the approved Final Report, this Foundation will make the following contributions to the Center. $ 100,000 for each calendar your from 20l l tough 2015 ard $50,000 fm each caleMm year from 2016 through 2020. During this to (10) yaarperiod, the parties to this agreement anticipate that the qty will provide an annual contribution to the Cotes toward its operating shortfalls in the amounts as estimated in the approved Final Report and subject to amnual City Council appropriation. mM23BM.1 4139ldsAOD) 08 038 ]. During the period January 1,Z01 I through December 3l, 2020, should the City cease or materially decrease its funding of the Cancer in a mamma inaavaistmt with the approved Final Report or should the level of City funding result in the Center not being capable of materially meeting the operational goals and standards established thereby then, at the sole option of the Foundation, the governing body of the Center, as created pursuant to the approved Final Report, shall mccramy the assets conveyed to it by the Foundation end the Agreement shall terminate. At that time, the Foundation may continue to operate the Center or may choose n A to do so. Should the governing body of the Center relocate the Canter from its current Two Hammond Street, Bangor location during the five (5) years curatorship January 1, 2011, then the Foundation shall have the option to cause the governing body to reconvey the land and baildings so conveyed to it and to take such action with respect to those assets as the Formulation, in its sole discretion, toy dean appropriao. Should such relocation take place during the period between January 1, 2016 and December 31, 2020 and unless the parties agree otherwise, the land and buildings conveyed by the Foundation to the Center shall be sold by the Foundation with the net revenue resulting[haefom paid ono-halfto the Center and one-half to the Foundation. Far the period January 1, 2011 through December 30, 2020, the governing body of the Center shell, under no wrommences, encumber my of the assets, including the red estate, transferred to it by the Foundation ant utilized in the operation of the Center without the prior written consent of both the City and the Foundation and on such terns as the City and the Foundation individually may bnpose. 8. From and after January 1, 2021 and to the extent that the Foundation shall not confine m contribute az least the sum of $25,000 per year to the operation of the Center, the governing rules of the Center shall be ameded such that the Foundation shall no longer have the right to appoint members of the governing body or to participate in the selection of the members of the Center who shall serve on the governing body. 9. If, for any reason, the Foundation fails to meet its financial commitments as outlined in Section 6 above (provided that prefunding obligations shall be acceptable at any time), or should the Foundation cease to exist at anytime during the period from January 1, 2011 through December 30, 2020, then, upon thirty (30) days written entice with opportunity to care given by the Center to the Foundation, any rights or potential rights the Foundation may have is the assets transferred to the Carter shall terminate and the governing miss of the Center shall be amended such that the Foundation shall no longer have the right to appoint members of the governing body or to participate in the solation of the members of the Center who shall serve an the governing body. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on rhe data first above written. WITNESS: CCTY OF BANGOR Its Herem3o Duly Authorized tW238@.1913914MIm COURT FOUNDATION, INC. By John Court IGSF idv Hereunto Duly Authomol (Wwv .1 43391 e ) 08 038 08 cis Hammond Street Senior Center Evaluation Committee Report September 24, 2007 Committee Members: Peter DErrice, Frank Farrington— Bangor City Council Joan Macohi, Charlie Taylor — HSSC Members Nelson Durgin, Phillips Strickland House Laura Mitchell, United Way Others Participants: Kathy Bernier, Director HSSC, Noelle Merrill, Director EAAA Background The Hammond Street Senior Center was established by the Cour) Foundation approximately ten years ago. The foundation's principal, John Coen, is planning for his retirement within the next four to five years and is seeking to partner with the City to Insure the continued operation of the Center Into the future. Specifically, he has suggested that a new non -profs entity be formed with board representation appointed by the City and the Foundation. Operating support provided to the Center would come from current sources along with annual grants from the City and the Foundation, with guaranteed although declining funding from the foundation through 2020. Evaluation Committee An Evaluation Committee was formed to analyze the proposal and assist the City in responding to it As a group, we were charged with analyzing the Center's current operations and costs; determining how and whether any of these costs could be reduce through participation in City purchasing programs; projecting revenues and expenses through 2015 M estimate the level of City participation required to maintain the Center's operations and programs; evaluating the potential of recruiting other partners who might have an interest in supporting the center; and developing a recommendation for full Council consideration. Center Operations The major revenues generated by the Center are donations which include an annual campaign, grants and contributions from surrounding communaies, activity revenues generated by fees for classes offered at the Center, and monthly fitness center fees. These revenues contribute 35%- 400/6 towards the total annual operating costs of $320,000. The remaining costs are currently funded by the Couri Foundation. On the expense side of the ledger, approximately 60% - 65% of total costs are payroll related. The current staff is made up of four full-time employees and 4 part-time employees. The next largest areas of expenses are utilities and insurance, each accounting for approximately 10% of total costs. 08 038 The foundation request indicated that insurance and fuel costs could be reduced via a partnership with the City. Staff verified with our insurance carrier that the City could not include the insurance needs of a new entity within its policy. As be fuel oil, based upon the usage for 2006, staff estimated the Center could have saved approximately $2,500 - $3,500 during that time. Actual savings would be dependent on the Clys costs at any point in the future. Therefore, it appears that there are no significant cost savings to be realized via a partnership with the City. On the revenue side of the equation, a number of potential sources were Identified. As a starting point, membership fees were seen as a necessity. One particular scenario, which is based upon charging all members and the respective community a membership fee, could generate approximately $53,000. Under this plan, Individual memberships would be borer for individuals whose resident community is a member. Based on the membership concept, there is an opportunity to increase other fee revenue by $5,400, dependent upon whether or not the home community was a member. Additional potential revenue sources that could not be quantified were identified as well such as foundation and gram funding and opportunities to rent the facility after hours for events or as a fitness center. Projected 2015 Operations Based upon current operations, assuming that the revenue stream would remain stable and fiat and that variable expenses would increase at the rate of 3% per year, projected revenues and expenses of the Center In 2015 would be; Revenue $111,800 Expenses $393.400 Net Loss $281600 * This estimate is basal upon current operations and does not faG r In any changes to operations or fee v udure . The Foundation proposed to fund $100,000 of the net costs of the Center through 2015. The remaining balance is expected to be funded by a change In expenses/revenues and City appropriation. Evaluate Viability of Other Potential Partners The Committee spent a significant amount of time discussing the potential to partner with other interested stakeholders to secure the future of the Center. As a group, a number of strong potential partners were identified, i.e. Eastern Area Agency on Aging, United Way, Phillips Strickland House. It was noted that the potential to include a number of other agencies existed if the group were to pursue options outside of the original proposal from the Court Foundation. 08 038 While recognizing that the original proposal from the Foundation did not include other partners, the Committee asked that staff follow up with the Foundation to gauge any interest In pursing this option. In speaking with ]ohn Couri, it was absolutely clear that this was not an avenue the Foundation was interested In pursuing. Committee Findings Throughout the review process, the Committee was unanimous in its support of the mission of the Center and the significant value It contributes to not only our community but the. region. Historically, the City has not dedicated adequate resources to serve its senior Population. The senior population represents a significant and growing segment of the OWs population. The Committee was unanimous in its desire to we the operation of the Center continue and Flourish. The Committee recognized the Inherent limitations of available City funding, the potential annual uncertainty that can exist far City supported programs, as well as the potential drop off in fund raising support for a "Bangor" program, both from Individual giving and from other communities. Many members of the Committee expressed the opinion that the City should not take a leadership role in a senior center given the availability of organizations that have more expertise In senior Issues/programs. Recommendation The majority of the Committee wished to pursue the option of a counter- proposal to the Foundation that would allow for Involvement of other Interested parties, not jus[ the City. Based upon staffs conversation with the Foundation, this is not an option. Council Action Outside of the recommendation to determine if a counter proposal would be considered, the Committee does not make any further recommendations. The City Council will need to make its decision based upon the Initial proposal as submitted (a copy of which Is attached), to which Mr. Court has requested a yes or no answer.