HomeMy WebLinkAboutWorkstudy Packet 8-08-06NOTICE OF THE
WORK STUDY SESSION OF
THE FOUNTAIN HILLS TOWN COUNCIL
Mayor Wally Nichols
Councilmember Mike Archambault
Councilmember Ginny Dickey
Vice Mayor Ed Kehe
Councilmember Henry Leger
Councilmember Keith McMahan
Councilmember Jay Schlum
TIME: 5:00 – 7:00 P.M. - WORK STUDY SESSION
WHEN: TUESDAY, AUGUST 8, 2006
WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS
16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ
NO ACTION CAN OR WILL BE TAKEN.ALL WORK-STUDY ITEMS LISTED ARE FOR DISCUSSION ONLY.The primary
purpose of work session meetings is to provide the Town Council with the opportunity for in-depth discussion and study of specific subjects.
Public comment is not provided for on the Agenda and may be made only as approved by consensus of the Council. In appropriate
circumstances, a brief presentation may be permitted by a member of the public or another interested party on an Agenda item if invited by the
Mayor or the Town Manager to do so. The Presiding Officer may limit or end the time for such presentations.
1.) CALL TO ORDER AND ROLL CALL – Mayor Nichols
2.) DISCUSSION of possible funding options regarding local not-for-profit community service
organizations.
3.) ADJOURNMENT.
DATED this 21st day of July, 2006.
By: Bevelyn J. Bender, Town Clerk
The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 837-2003 (voice) or 1-800-367-8939
(TDD) 48 hours prior to the meeting to request a reasonable accommodation to attend this meeting or to obtain agenda information in large print format.
Supporting documentation and staff reports furnished the council with this agenda are available for review in the Clerk’s office.
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TOWN OF FOUNTAIN HILLS
OFFICE OF FINANCE DIRECTOR
INTER OFFICE MEMO
TO: Mayor and Town Council DT: August 4, 2006
FROM: Tim Pickering RE: Funding for Not-For-Profit Agencies
EXECUTIVE SUMMARY
Over the past several years the Town of Fountain Hills has received and granted requests
for funding from not-for-profit agencies during the annual budget process. However, the
process for agencies to request and the Town to approve funds has been very informal.
During the FY2006-2007 budget meetings the Council requested that the Town develop a
formal process that will establish the amount and process for funding not-for-profit
agencies.
A review of other municipalities and how they fund not-for-profit agencies was
conducted which assisted the staff in staff preparing the following draft options for the
Council’s consideration. See individual city program details attached.
Three potential options to handle non-profit funding for your consideration are:
1. Keep the same. Town receives a letter; places money in budget; and amount
approved.
2. Recommendation by committee. Agencies submit proposals; dollar amount
recommended; and Council decides somehow.
3. Contracts for services. Council decides needed services; proposals received;
measurements in contracts; and Council approves contracts.
OPTION 1 - KEEP THE SAME
The Town receives a request for donation around January and February. The following
dollars have been awarded for the past four budget years:
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SUMMARY OF PAST NOT-FOR-PROFIT AWARDS
Name of Group 2003-04 %* 2004-05 %* 2005-06 %* 2006-07 %*
Boys & Girls Club
of Scottsdale
$130,000 1.1%$145,000 1.0%$160,000 1.0% $100,000 0.6%
Chamber of
Commerce/Tourism
Bureau
$105,500 0.9%$155,000 1.1%$125,000 0.8% $125,000 0.7%
Fountain Hills
Theater
$40,000 0.3%$50,000 0.4%$50,000 0.3% $50,000 0.3%
Senior Services** $40,000 0.3%$55,000 0.4%$0 0.0% $0 0.0%
Other $0 0.0%$0 0.0%$0 0.0% $50,000 0.3%
Total $315,500 2.6%$405,000 2.9%$335,000 2.1% $325,000 1.9%
* As a percent of the General Fund budget
** Senior Services incorporated as a division of Town in FY05/06
During the 2006-07 fiscal year, the Extended Hands Food Bank requested $50,000.
OPTION 2 - RECOMMENDATION BY COMMITTEE
Suggestions have been made to return to a process that was used in Fountain Hills’ past.
Procedures, reporting requirements and required documentation for all applicants for
funding, similar to other municipalities, would need to be approved in resolution or
ordinance form. The ordinance could include the following:
• An article creating an ad-hoc committee that could review applications for funding,
conduct interviews and make recommendations to the Council. The committee could
be selected through an application process within the community, similar to our
commissions’ election process. Applicants could have a financial or non-profit
background and the committee could consist of one council member, two citizens and
two staff people (PIO and Finance). The selection could be done annually to ensure
complete fairness.
• Funding could give priority to “start-up” monies, not annual funding for an infinite
period of time (continual requests make it difficult for new agencies to also obtain
funding).
• An application could be good for one year – a new application would be submitted
each year.
• All Town funds allocated or granted to any non-profit agency shall be by means of a
written contract based upon services to be provided to or work to be performed on
behalf of the Town of Fountain Hills and its residents in compliance with Article IX,
Section 7 of the Arizona Constitution regarding the use of public funds.
• Funds allocated or granted under the provisions of the ordinance would be released
only after such time that the receiving agency has provided all of the required
documentation for the previous year.
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• A spokesman for those requesting funds could put the request in writing and appear
before the council in person to explain the benefits of the donation. Donations for a
political party, a specific candidate for an office or an obvious political cause will not
be approved.
Option 2 - Guidelines
If a committee is formed to review the not-for-profit funding applications the following
factors can be used as guidance when making a choice among all the requests:
• Does the application demonstrate human or cultural services essential to enriching the
health and well being of the citizens of Fountain Hills?
• Does the application demonstrate the ability to implement strategies and policies
identified in the Town’s overall general plan and strategic plan?
• Does the application demonstrate a measurable positive impact to the Town of
Fountain Hills?
• Does the application demonstrate the potential to enhance economic development
efforts?
• Does the application demonstrate the capacity to manage funding properly and the
ability to deliver programs in a cost-effective manner?
• Does the application demonstrate a reasonable and viable method of providing
service?
• Does the application demonstrate evidence and ability to secure additional matching
funds to support the proposed service, including sources from other political
jurisdictions and the private sector?
• Does the application demonstrate the ability to fulfill public desire as identified in
public meetings, surveys, strategic plan, etc?
• Is the proposal technically correct and presented in the order and format requested by
the stated deadlines?
• Has the agency completed the application process and the application has been
determined to be accurate and complete?
• Does the agency provide a service consistent with an existing recognized Town need,
policy, goal or objective?
• Does the application demonstrate the ability to address and/or partner with the Town
in assisting with the needs of the Town of Fountain Hills residents? Needs categories
that could be considered a priority to the Town are as follows:
Tourism
Arts/Culture
Youth Services
Social services
Option 2 - Establishing Level of Funding
Each year the staff will provide the committee with the amount of funds available for
next fiscal years funding for not-for-profit agencies based on percentage of budget. An
established budgetary percentage of the Town’s budget that will be used each year for
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donations. Currently, the amount if 1.9% of the General Fund budget. Fountain Hills
Resolution 1996-83 will have to be repealed. The attached Resolution 1996-83, passed in
November 1996, designated the first $50,000 of bed tax to promote retail trade, tourism,
the hospitality industry, and parks development.
Funding levels and requirements would include the following:
• Matching funds – the agency shall demonstrate that they have collected 50% of the
amount requested from other sources and the Town will match twice the amount as
matching funds.
• When the total amount of funds that are appropriated are awarded no further requests
will be considered.
• First time awards will be capped at $5,000
• No more than 10 percent of the grant may be used for staffing costs.
Option 2 - Other Criteria
• A written agreement could be completed for each recipient of Town General Fund
monies for the fiscal year as soon as the Council makes award. These funding
agreements would be signed and returned to the Town before any Town funds will be
released.
• Programs would benefit the citizens of the Town.
• A policy statement on not-for-profit funding would have to be added to the Town’s
financial policy “as a component of the budget process and when fiscal resources
permit.”
• Documentation that could be required from agencies:
- Agency’s most recent audit report including certified financial statement
- Detailed expenditure statement showing an accounting of all previously received
and expended/not expended town funds
- Name of source and amount of funding received from all other sources such as
non-governmental agencies, membership dues and fees, private contributions, etc.
- Internal Revenue Service determination of non-profit status
- Line item budget for the current fiscal year
- List of any additional pending applications for funding to include funding source
and dollar amount requested
- Proof of corporate status
- Names and addresses of current board members
- Report outlining the agency’s performance and accomplishments
Page 4 of 11
Option 2 - Recommendation by Committee Schedule of Key Dates
The following timetable is the proposed schedule for the not-for-profit funding process
for the upcoming fiscal year.
Task Responsible Party Date
Funding level determined Town staff September
Applications released Town staff November
Publish Ad in Paper Town staff November
Advertise for ad hoc committee
members
Town staff December
Proposals Due Proposing Agencies January
Ad hoc committee members
appointed
Town Manager January
Proposals delivered to Not-for-Profit
Review Committee
Not-For-Profit Review
Committee
January
Committee Recommendations
delivered to Council
Town staff February
Award by Council Town Council March
Not-For-Profit Grant agreements
initiated; after award by Council
Town staff May
Page 5 of 11
Option 2 - Committee Funding Application
An application such as the following could be utilized:
APPLICATION INFORMATION:
Applicant Organization
Mailing Address
Site Address
Telephone # Fax #
Chief Administrative Officer
Contact Person
Federal ID Number
FUNDING REQUEST:
Program Name
Program Description (1 sentence) To provide:
Staff Salaries $
Employee Related Expenses $
Supplies $
Equipment $
Capital Outlay $
Other (Specify) $
$
$
Total Funds Requested $
SUMMARY OF PROPOSAL: Please attach no more than two (2) pages providing brief
statements indicating:
1) What service(s) are proposed and how the service(s) will be provided
2) The number and characteristics of the individuals/families expected to be served.
Please use the enclosed Attachments Checklist to ensure all required documentation
and supplemental information is attached to this application. Incomplete application
package will be rejected and returned to applicant.
_______________________________________________
Signature of Authorized Official
_______________________________________________
Print Name of Signature
Page 6 of 11
Option 2 - Application Package Checklist
An application packet checklist could include the following:
Please return the following information.
Application Form – (Original)
Summary of Proposal – not to exceed two pages. (Original)
Date and proof of Incorporation – (Copy)
Internal Revenue Service letter of non-profit eligibility status – (Copy)
Current list of Officers and Directors – (Copy)
Brief statement in your own format (not to exceed two pages) that contains the following:
History of organization, description of current service(s), information on current staff,
location(s) at which services are provided, and future goals. – (Copy)
Most recent financial audit of organization – (Copy) – (See Note 2)
Agency fiscal year – (Copy)
Most recent IRS Form 990 – (Copy)
Fee structure for agency service(s). (Copy) – (See Note 1)
Note 1: Information may not be applicable to your organization or program.
Required only if such information is available for the agency or program
requesting funding.
Note 2: If the requesting agency does not have an annual financial audit, please
enclose the most recently completed fiscal year unaudited financial
statements.
Option 2 - Summary
As you can read, this method becomes quite encompassing. Another method to provide
citizens with services they desire is to contract with non-profit agencies to provide these
Council-decided services.
Page 7 of 11
OPTION 3 - CONTRACT FOR SERVICES
Another method of determining the proper funding for services the Town wishes to
provide through non-profits would be to contract for the needed services. As we do with
many services, be it developing a survey or coordinating a strategic plan, desired services
are written and interested parties are asked to submit proposals to provide those desired
services.
With this method, the Council decides the priority services. The non-profits are
responding to your needs, not vice-versa. This also will eliminate an onslaught of
multiple non-profits requesting donations for services that should not be provided by the
Town however worthy those services may be. This procedure would ensure all Town
funds allocated to any non-profit agency are in a written contract based upon services to
be provided to or work to be performed on behalf of the Town of Fountain Hills. This
ensures the Town complys with Article IX, Section 7 of the Arizona Constitution
regarding the use of public funds. Funds allocated under the provisions of the ordinance
will be released only after such time that the receiving agency has provided all of the
required services outlined in contract.
Option 3 - Service Categories
Requests for proposals could be written to ask non-profits to submit proposals for the
following service categories. In developing the list of examples of services, I contacted
our existing providers to assist me.
The Council would need to finalize the following examples of service needs before
requesting proposals from entities to provide these services:
• Tourism
- Provide tourism marketing and advertising for the Town of Fountain Hills.
- Distribute media releases and cultivate stories in various publications to publicize
the amenities of Fountain Hills.
- Produce 40,000 Fountain Hills/Ft. McDowell Visitor Guides on an annual basis.
• Arts/Culture
- Offer children of Fountain Hills the opportunity to participate in live theater
productions.
- Produce two musicals a year at Fountain Park Amphitheater.
- Provide an outreach and social awareness program with a youth theater program.
- Provide workshops and summer theater camps for the youth.
- Provide an outlet for youth community service hours.
• Youth Services
- Teach youth life skills.
- Provide youth education and career development training.
- Provide youth character and leadership development.
- Provide before and after school services for children.
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- Offer computer training for Fountain Hills children, including internet safety
training.
• Social services
- Accept and handle requests for food to low-income applicants.
- Provide an annual report showing number of Fountain Hills residents served.
- Provide an outlet for adult community services hours.
Option 3 - Establishing Level of Funding
Level of funding would be proposed by the entity submitting a proposal to provide the
service and would be one factor in determining who would be awarded one of the four
service contracts.
Option 3 – Additional Information
• A written contract will be completed and signed by the agency before submission to
Council for approval. The contract could be for multiple years, which is beneficial
for both the agency and the Town.
• Additional information may be requested after proposals are received as required
from individual applicants. Documentation of sources of agency revenue and other
information that is difficult to verify would not be needed under this method of
funding.
Option 3 - Advantages
• Town is outsourcing services deemed by the Council to be beneficial to residents.
• Control of funds is determined by written agreement by parties.
• Town receives measurable outputs.
• The process is fair, as any agency can submit a proposal for a needed service
category.
• The Town can compare cost of providing same service in-house or between other
agencies.
• Service contracts can be written for multiple years, thus stabilizing both Town and
agency budgets.
Option 3 - Disadvantages
• More contract oversight needed.
• Cost of contract legal review.
Page 9 of 11
Page 10 of 11
Option 3 - Service Contract Schedule
The following timetable is the proposed schedule for outsourcing services:
Task Responsible Party Date
Decide service categories Council October
Publish ad in paper requesting
proposal for services
Town staff November
Proposals Due Proposing Agencies January
Review of proposals Town staff February
Contracts negotiated and signed by
agency
Town staff March
Contracts presented for approval to
Council
Council April
Contracts go into effect Town staff July 1
Page 11 of 11
DECISION MATRIX
To assist the Council in making a decision on this difficult subject, a simple decision
matrix of some success factors has been provided.
Keep Same Committee Contract
Accountability Low Low High
Political Medium High Low
Simplicity Low High Medium
Fairness Low High High
Elasticity of Cost Known, but rising
each year
Unknown, and each
year could rise
Known, and held by
contract at time of
approval
SUMMARY
As you can read from reviewing other cities’ policies, this issue of non-profit funding is
not easy to solve. At the workshop, it would be most helpful if the Council provided
direction to the staff as to which option, or combination of options, the Council wishes to
pursue.
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