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CR 04-175 Approval Of the Hopkins Center for the arts, inc Agreement CITY OF - . October 27,2004 HOPKINS Council Report 2004-175 Approval of the Hopkins Center for the Arts, Inc. Agreement Proposed Action Staff recommends adoption of the following motion: Move to approve the Hopkins Center for the Arts Inc. AQreement and direct staff to execute the aQreement with Hopkins Center for the Arts, Inc. Overview At the April 27, 2004 work session of the Hopkins City Council the non-profit Hopkins Center for the Arts Inc. (HCA, Inc.) presented a revenue sharing proposal to the Council. The Council was in favor of the proposal and directed city staff to work with HCA, Inc in the development of an agreement that met the objectives presented in the HCA, Inc. proposal. The agreement was drafted by modifying sections of the original Cooperative Agreement that HCA, Inc and the City entered into in September of 2000. The city attorney drafted the document. The agreement has been reviewed and approved by HCA, Inc. board and HCA, Inc, staff. The attached agreement was reviewed by the City Council at the September 28, 2004 Council work session. Staff requests that the City Council approve the document and direct staff to execute the agreement with HCA, Inc. . Primary Issue to Consider . How does the HCA, Inc Agreement positively impact the Arts Center SupportinQ Information . Hopkins Center for the Arts Agreement a . Strachota cilities Director Financial Impact: $ Budgeted: Y/N N Source: -- Related Documents (CIP, ERP, etc,): Notes: . Council Report 2004-175- Page 2 . Primary Issue to Consider . How does the HCA, Inc Agreement positively impact the Arts Center? The HCA, Inc Agreement improves the revenue potential of the Arts Center in the following areas: . Space usage fees - Space usage fees under the past agreement with HCA, Inc were based on 5% of the expense budget for an event in the main theater. The new agreement space usage fees are based on 10% of gross ticket sales. This reduces the risk on events for HCA, Inc by lowering expenses, while increasing potential revenues for the Arts Center by distributing more revenues to the Arts Center on well-attended events, . Membership dues - HCA, Inc will share with the Arts Center 10% of all memberships for businesses, gifts and less than $500 individual memberships. This is in support of the facility that makes the HCA, Inc membership program possible. While membership revenues were theoretically shared in the previous agreement this would only happen at the end of the HCA, Inc. fiscal year if excess revenues were available. This has not happened to date so this new method essentially creates new revenue. . . Annual Fundraising - The new agreement identifies a minimum of $5,000 net income to the Arts Center from HCA, Inc fundraising. Again the previous agreement called for sharing of fundraising revenue but shared fundraising revenues were never achieved under the old agreement. This agreement guarantees $5,000 and more if HCA, Inc is successful in their fundraising efforts, . . AGREEMENT THIS AGREEMENT is made and entered into effective as of the 1st day ofJanuary, 2004, by and between the City of Hopkins, a municipal corporation under the laws of Minnesota ("City") and Hopkins Center for the Arts, Inc., a non-profit corporation under the laws of Minnesota ("HCA"), RECITALS: A The City is the owner of an arts and recreational facility located at 1111 Mainstreet, Hopkins, Minnesota, known as the Hopkins Center for the Arts (the "Facility"). The City is authorized to own and operate the Facility and to enter into this Agreement by Minn. Stat 471.16- 471.191. . B. RCA is a non-profit corporation organized and existing under Minnesota law and qualified as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, The purpose and mission of HCA is to build community through the arts by fostering creative expression and providing artistic and educational opportunities for people of all ages, C, The City and RCA share the common objective of building community through the arts by promoting the successful use and operation of the Facility, with priority being given to arts-related uses, and are entering into this Agreement for the purpose of accomplishing that common objective. D. On October 26, 2000, the City and RCA entered into a Cooperative Agreement ("Cooperative Agreement") stating the terms and conditions under which the parties cooperated in the programming and fundraising functions for the Facility and HCA performed certain programming and fundraising functions described in the Cooperative Agreement E. The City and RCA have agreed to terminate the Cooperative Agreement, effective December 31, 2003, and to enter into this Agreement setting forth the terms and conditions under which the parties have agreed RCA will continue to perform programming and fundraising functions for the Facility as described in this Agreement. By executing this Agreement, the City and RCA agree the Cooperative Agreement is terminated, effective December 31,2003, and is replaced by this Agreement, effective January 1, 2004, . c: HopcivillAgrccmcntHopkinsHCA- 1 - . NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated and made a part of this Agreement, and of the terms, covenants and conditions stated in this Agreement, the City and RCA agree as follows: 1, Retention and Term. The City and RCA hereby enter into this Agreement, and the City retains RCA to perform, and RCA accepts, the duties and responsibilities stated in this Agreement and agrees to perform the same for a term commencing on the date of this Agreement and continuing indefinitely until terminated by either party, as provided in this Paragraph, This Agreement may be terminated as follows: i) either party may terminate this Agreement in the event the other party defaults in the performance of its obligations under this Agreement, and such default is not cured within thirty (30) days of written notice to the defaulting party, which notice shall specify the nature of the default; or ii) either party may terminate this Agreement at any time, without cause, upon ninety (90) days prior written notice to the other party. Upon termination of this Agreement, for whatever reason, each party shall promptly remit to the other, as soon as the same is determinable after the date of termination and within the time periods specified herein, all amounts due such other party under the terms of this Agreement Further, upon termination, for whatever cause, HCA shall, not later than ten business days after the effective date of termination, deliver to the City, copies of all books, records, contracts, accounts, statements, financial records and other documents in the possession or control ofRCA pertaining to the Facility and its . operation and the performance of RCA' s duties and responsibilities under this Agreement or the Cooperative Agreement that have not previously been delivered to the City, and any and all other records or documents, whether or not described herein, which are necessary or desirable for the ownership and operation of the Facility or the continued performance of the duties and responsibilities formerly performed by RCA RCA shall also, as soon as reasonably possible, provide final accountings to the City as required by Paragraphs 2,h, and 3.f of this Agreement, complete through the date of termination, Any and all documents and materials related to the performance of contracts for HCA Events shall also be delivered to the City, All personal property of the City shall be delivered intact to the City or its representatives, HCA agrees to do all things reasonably necessary to cause an orderly transfer of its duties and responsibilities under this Agreement without detriment to the interests of the City. After termination of this Agreement, the revenues and expenses incident to the performance of HCA's duties under this Agreement shall be accounted for and distributed as provided in Section 5 of this Agreement, which may be subsequent to the date of termination. 2, Proerammine Duties of HCA, During the term of this Agreement and subject to its terms and conditions, HCA shall be responsible for scheduling, conducting and administering certain concerts, performances, receptions, visual arts displays, community arts programming and other events (collectively "RCA Events") in the Facility during those times and using those spaces within . C:HopciviJ\AgreemclltHopkillsHCA- 2 - . the Facility that are available for such use by the City, The following terms and conditions shall apply to the performance ofRCA's duties with respect to programming RCA Events: a, RCA acknowledges it is familiar with the terms and conditions of the Leases ("Leases") between the City, Stages Theater Company ("Stages") and Independent School District No, 270 ("District 270"), which Leases specify a process for allocating the use of dates and spaces within the Facility between the City, Stages and District 270, RCA acknowledges that the availability to the City of dates and spaces within the Facility is limited by the Leases and that RCA Events may only be scheduled during the times and dates and using the spaces available to the City under those Leases. Further, RCA agrees that it shall participate with and assist the City in the meet and confer process required by the Leases with Stages and District 270 to the end that the City will obtain the most advantageous dates and spaces available to the City, consistent with the terms of the Leases, for scheduling RCA Events within the Facility. The dates and spaces that become available to the City annually as a result of the meet and confer process are herein referred to as the "Usage Dates", b, The City and RCA agree that only certain of the Usage Dates shall be available for scheduling RCA Events, and that the remaining Usage Dates shall be reserved to the City and shall not be subject to this Agreement. In addition, it is agreed that the City reserves the right to schedule and conduct concerts, performances, receptions, community arts programming and other arts-related events (collectively "City Events") in the Facility that do not require sponsorship, participation, incentives or promotion by RCA The City and RCA agree that . the following priorities shall apply to the use and scheduling of the Usage Dates: First, certain Usage Dates shall be reserved to the City for recurring annual arts- related events and that the Usage Dates reserved for such events shall not be available for programming of RCA Events by RCA In addition, events and functions for which the City has commitments on the date of this Agreement shall have priority to the extent of those commitments as they exist on the date of this Agreement. Second, the Usage Dates shall be available for programming and scheduling ofRCA Events by RCA to the end that the maximum revenue shall be derived from scheduling and programming RCA Events consistent with the mission ofRCA and the provisions of this Agreement. Third, the RCA shall have priority in scheduling of Usage Dates over City Events, Usage Dates to be reserved by the City for "occasional user" functions and non arts- related functions, discounted fee use by users using the Facility under the City's "community use" policy, and activities including receptions, annual leases to civic clubs and other service organizations, civic functions, business meetings, educational activities, fundraising events and other recurring annual events, The City and RCA shall work cooperatively with one another to allocate the Usage . C:HopciviIIAgreementHopkinsHCA- 3 - . Dates in a manner consistent with the priorities and the terms and conditions stated in this Paragraph. In conjunction with the meet and confer process described in the Leases, and/or immediately following completion of such meet and confer process, the City and RCA shall engage in a similar process for the purpose of allocating and designating the Usage Dates to be reserved by or made available to the City and the Usage Dates to be made available for programming HCA Events under this Agreement In the event the City and HCA are unable to agree as to allocation of any particular date, the priorities stated in this paragraph shall control and the City shall make the final determination as to the availability of any particular Usage Dates for programming RCA Events under this Agreement c, The terms and conditions of all contracts and agreements related to RCA Events arranged and booked by HCA under this Agreement shall be negotiated and determined by HCA, and RCA is given the authority to enter into such contracts and agreements, HCA agrees that it shall, however, incorporate such reasonable terms and conditions in contracts and agreements for RCA Events, as the City shall request by prior written notice to HCA RCA shall deliver copies of all contracts and agreements for HCA Events to the City within seven (7) business days of execution thereof d. HeA shall be responsible for the administration and performance of all contracts and agreements related to HCA Events arranged and scheduled by RCA under this Agreement These responsibilities include, but are not limited to, advertising, promotion, negotiating and . drafting contracts for HCA Events, administration of contracts and agreements for HCA Events, and arranging for all services and staffing (including ticket sales and collection) to be provided during HCA Events. e. RCA shall be solely responsible for the enforcement of all contracts and agreements for RCA Events and collection of amounts due under such contracts and agreements, f RCA shall be entitled to use the services of City employees and staff to perform the duties assumed by it under this Section 2, upon the terms and conditions stated in Section 4 of this Agreement. g, All costs and expenses incurred in the performance ofHCA's duties under this Section 2 and the revenues derived from the scheduling of RCA Events shall be paid, accounted for, deposited and distributed as stated in Paragraph h, of this Section 2 and in Sections 5 and 6 of this Agreement. h. HeA shall provide the City, upon request, copies of all statements, invoices, billings and other documents evidencing revenues and expenses for all RCA Events. No later than sixty (60) days after the end of each Activity Year as defined in Paragraph 5,a.) during the term of this Agreement, HCA shall deliver to the City a detailed, itemized accounting for an HCA Events arranged and/or administered by the HCA under this Agreement for the preceding Activity . Year, detailing all revenues and expenses in a format approved by the City. In the event this C:Hopcivil\AgrccmenlHopkinsHCA- 4 - . Agreement is terminated before the end of an Activity Year, RCA shall provide the accounting required by this paragraph h, no later than sixty (60) days after the date of termination of this Agreement I. The authority and responsibility of RCA shall be limited to that explicitly described in this Agreement The City retains all rights, responsibilities and authority related to the ownership and operation of the Facility that are not eXplicitly delegated to RCA by this Agreement. The rights, responsibilities and authority retained by the City shall specifical1y include all right, title and interest of the City in and to the Leases with Stages and District 270 and responsibility for the repair, maintenance and physical operation of the Facility. J. Upon termination of this Agreement, the City shall have the right and option to require RCA to assign all of its right, title and interest in all contracts and agreements for RCA Events to the City, upon written notice to RCA given within thirty (30) days of service of Notice of Termination under Section 1 of this Agreement RCA agrees that it shall assign all such contracts and agreements to the City, provided the City assumes all liabilities under such contracts and agreements from and after the date of assignment , If the City does not exercise its right and option to require RCA to assign its right, title and interest in any contract or agreement for an RCA Event to the City at the time of termination of this Agreement, RCA shall have the continuing right to perform any such contract or agreement in effect at the time of termination of this Agreement and all of the terms, covenants and conditions of this Agreement applicable to the performance of any such contract or agreement shall remain in . effect until such contract or agreement has been fully performed. 3, FUlldraisin2 Functions Of HCA, During the term of this Agreement, RCA shall work cooperatively with the City and assume primary responsibility for certain fundraising activities for the benefit of the Facility in accordance with the provisions of this Agreement and, in that capacity, shall solicit, and obtain membership enrollments and contributions for the uses and purposes stated below. However, the parties acknowledge that, in consideration of the City's agreement to allow HCA to use the Facility, and to provide the use of City employees and maintenance of the Facility as provided in this Agreement, the City is entitled to receive a portion of the Fundraising Event and-Membership Revenues as provided in Section 5 of this Agreement RCA shall perform these fundraising activities subject to the following terms and conditions: a. The membership dues, and monies specifically obtained by HCA, as a result of fundraising events conducted by RCA in accordance with the provisions of this Agreement are hereinafter referred to as the "Fundraising Events and Membership Revenues," Fundraising Events and Membership Revenues shall not include any grants obtained by HCA from any grant making agency or institution, business sponsorships of $500,00 or more per year or any other bequest, gift or payment received by RCA that is not specifical1y included in the definition of "Fundraising Events and Membership Revenues" stated in the first sentence of this subparagraph a" . C:Hopcivil\AgreementHopkinsIlCA- 5 - . b, HCA shall diligently pursue and actively solicit Fundraising Events and Membership Revenues to the end that the maximum possible revenues shall be obtained from such fundraising activities, The fundraising duties assumed by HCA under this Agreement shall include conducting fundraising events, soliciting membership enrollment and dues and all other activities that are reasonably necessary to achieve the fundraising objectives in this Agreement. c, HCA may use the assumed name "Hopkins Center for the Arts" in connection with the fundraising activities conducted by it under this Agreement. Such use shall be on a non- exclusive basis, and the City shall continue to use such name in connection with all activities of the City related to the Facility consistent with the provisions of this Agreement. Upon termination of this Agreement, HCA shall discontinue use of the name "Hopkins Center for the Arts", d, All Fundraising Events and Membership Revenues obtained by HCA under this Agreement shall be payable to "Hopkins Center for the Arts, Inc,." e, All Fundraising Events and Membership Revenues obtained by HCA under this Agreement shall be deposited and accounted for as provided in Section 6 ofthis Agreement. HCA shall retain copies of all statements, invoices and billings for costs and expenses related to fundraising activities conducted pursuant to the terms of this Agreement, and the City shall have the right to inspect all such records upon request to the HCA. It shall be the . responsibility of HCA to pay such statements, invoices and billings, HCA shall cooperate with the City in compiling financial and other information as necessary for the City to complete any bookkeeping and accounting work necessary to account for revenues from fundraising and expenses related thereto, HCA shan also provide the City, upon request, with originals and/or copies of all documents related to fundraising activities, In no event shall the City assume responsibility for any record keeping, bookkeeping or accounting related to the business or affairs ofHCA or its status as a tax-exempt organization under Section 501 (c )(3) of the Internal Revenue Code. r No later than sixty (60) days after the end of each Activity Year during the term of this Agreement, RCA shall deliver to the City a detailed, itemized accounting of all Fundraising Events and Membership Revenues for the preceding Activity Year, detailing all revenues from fundraising activities under this Agreement and expenses related thereto in a format approved by the City, In the event this Agreement is terminated before the end of an Activity Year, RCA shall provide the accounting required by this paragraph f, no later than sixty (60) days after the date of termination of this Agreement. g, RCA shan maintain and submit all required reports, returns, disclosures and financial statements and records to the Internal Revenue Service, Minnesota Department of Revenue, Minnesota Attorney General Charities Division and any other state or federal agency or authority to which reports or financial disclosures are required to be made in connection with . the fundraising activities to be conducted under this Agreement. Copies of all such reports, C:Hnpcivil\^greelllcntHopkin~HCA- 6 - . returns, disclosures and records shall be promptly delivered to the City, h. HCA shall maintain its status as an organization described in Section 501 (c)(3) of the Internal Revenue Code at all times during the term of this Agreement. 1. HCA shall be entitled to use the services of City employees and staff to perform the duties assumed by it under this Section 3, upon the terms and conditions stated in Section 4 of this Agreement. J. HCA shall pay all expenses that it incurs in performing its fundraising activities under this Agreement, k. The authority and responsibility of HCA in its fundraising capacity shall be limited to that delegated and described in this Agreement, The City retains all rights, responsibilities and authority related to the ownership and operation of the Facility that are not explicitly delegated to HCA by this Agreement, including the right to conduct other fundraising activities in its own behalf or to employ third parties to conduct fundraising activities during the term of this Agreement, provided the City shalI do so in good faith and shall not materially interfere with the fundraising activities to be performed by HCA under this Agreement. 4. Use ofCitv Emnlovees. The City and RCA agree that HCA shall, subject to the terms and . conditions described in this Section 4, be entitled to use the services of the Facilities Director, Executive Arts Director and Scheduling Coordinator employed by the City, or other City personnel designated by the City, for the purpose of performing the duties and responsibilities assumed by HCA under Sections 2 and 3 this Agreement. The employees listed above, and any other City employee assisting the HCA, are and shall at all times remain City employees and shall not in any way be deemed an employee or agent of the HeA The City retains all employment authority over the employees, including but not limited to the right to establish work schedules and compensation rates, the right to supervise the employee's performance of his/her job duties, including those performed under this Agreement, and the right to make all decisions regarding promotion, demotion or discipline of the employee, Further, the City retains an obligations for the employees' compensation, including payment of wages, withholding and payment of employment taxes, payment of contributions for benefits, including but not limited to insurance and retirement benefits and inclusion of the employee under the City's Worker's Compensation coverage, Reemployment Insurance coverage, liability insurance coverage and any and all other similar coverages, The Executive Arts Director shalI be available to the HCA for a total of no more than forty (40) hours per week. If the HCA demonstrates to the Facilities Director that the use of City . employees for more than forty (40) hours per week is necessary for the HCA to perform its duties and C:Hopcivil\AgreementHopkinsHCA- 7 - . responsibilities under this Agreement and the Facilities Director determines additional use of City employees will serve the best interests of the HCA and the City, the City will provide such additional use of City employees to the RCA as is determined to be reasonably necessary in the discretion ofthe Facilities Director. The use of City employees by the HCA shall be upon and subject to the following additional terms and conditions: a, The Facilities Director or other City employee designated by the City shall determine which City employee or employees shall be made available to HCA, the dates and times of such availability, and the Facilities Director's determination in this regard shall be final. b, There shall be no charge to RCA for its use of City employees as described in this Agreement c, HCA shall be entitled to use City employees solely for the purpose of performing the duties and responsibilities assumed by HCA under this Agreement. d, HCA shall be entitled to use space within the Facility designated by the City for the purpose of performing its duties and obligations under the Agreement e, The City employees may use office equipment, telephones, computer systems and other property of the City while performing services for RCA without charge to . HCA f The City agrees that BCA shall be entitled to require that the City employees to be made available for use by the HCA shaH be qualified to perform the services to be provided by BCA under this Agreement and otherwise competent to fulfill the objectives of this Agreement. To that end, HCA may periodically prepare and deliver to the City a statement of goals and objectives, including criteria to be incorporated in the job description of the Executive Arts Director, to be accomplished by the City employees to be made available to the HCA under this Agreement in furtherance of HCA's responsibilities hereunder. Such periodic statements may include an evaluation of prior performance and accomplishment of the goals and objectives identified by the RCA A representative of the RCA may also participate in interviews of candidates for the position of Executive Arts Director, provided all decisions regarding the employment of the Executive Arts Director shall be made solely by the City, 5, Expenses and Division of Revenues, Payment of expenses, consideration for the services performed by RCA under this Agreement and payments to the City for the use and maintenance of the Facility and use of City employees shall be made and distributed as follows: . a. Definitions: In addition to the words and phrases defined elsewhere in this Agreement, which C:HopciviIIAgrecmclllHopkinsHCA- 8 - -, . definitions are incorporated in this Section 5, the following words and phrases, when used in this Agreement, shall have the meaning stated below: "Activity Year" shall mean and refer to each successive twelve (12) month period beginning on July 1 and ending on June 30. "Event Revenues" shall mean and refer to all ticket receipts derived from RCA Events scheduled and administered by RCA under Section 2 of this Agreement ,Any revenues or I other payments received by RCA for activities using the art gallery room( s) or for Fundraising Events shall not be included in Event Revenues. "Fundraising Events and Membership Revenues" shall mean and refer to the "Fundraising Events and Membership Revenues" defined and identified in Paragraph a, of Section 3 oftrus Agreement. "Fundraising Events Revenues" shall mean and refer to the net amount of all of the Fundraising Events and Membership Revenues except for the Membership Revenues, after deduction of all fees, costs and expenses related thereto, "Membership Revenues" shall mean and refer to all membership dues payments made to HCA and included in the definition of Fundraising Events and Membership Revenues stated in Paragraph 3 a, of this Agreement . b, Payment of Expenses, RCA shall pay all fees, costs and expenses of whatever kind or nature that it incurs or which result from the activities performed by HCA under this Agreement, induding, but not limited to, the programming activities described in Section 2 of this Agreement and the fundraising activities described in Section 3 of this Agreement c, Division of Event Revenues, HCA shall pay the City ten percent (10%) of aU Event Revenues for each Activity Year for events booked or conducted in the main theater located within the Facility, without deduction of any expenses related thereto, However, any rebate$ due to I community partners on tickets purchased by community partners members shall be subtracted from the Event Revenues for events in the main theater before calculating the ten percent (10%) payment due to the City. RCA shall also pay the City five percent (5%) of Event Revenues for each Activity Year for all events conducted or booked in the Facility with the exception of those events conducted or booked in the main theatre, without deduction of any expenses related thereto. d, Membership Revenues, RCA shall pay the City ten percent (10%) all Membership Revenues, for each Activity Year during the term of this Agreement. e. Fundraising Events Revenues, RCA shall pay the City a percentage of all Fundraising Events Revenues for each Activity Year during the term of this Agreement as follows: . C:ITopcivil\AgreetllentlIopkinsHCA- 9 - . i) The City shall receive fifty percent (50%) of the first $20,000,00 of Fundraising Events Revenues for each Activity Year during the term of this Agreement ii) The City shall receive twenty-five percent (25%) ofFundraising Events Revenues for each Activity Year during the term of this Agreement that exceeds $20,000.00 up to a maximum of$50,000.00. iii) The City shall receive ten percent (10%) of Fundraising Events Revenues for each Activity Year during the term of this Agreement that exceeds $50,000.00 up to a maximum of $100,000,00, iv) The City shall receive five percent (5%) ofFundraising Events Revenues for each Activity Year during the term of this Agreement that exceeds $100,000,00, If the payments to the City for its percentage of Fundraising Events Revenues during any Activity Year are less than $5,000,00, HCA shall pay the City for such Activity Year a payment equal to the difference between the amount received by the City as its percentage of Fundraising Events Revenues and $5,000,00 so that the City always receives a minimum payment of $5,000.00 from the Fundraising Events Revenues, f Payment The payments due to the City as provided in Paragraphs c, d and e ofthis Section 5 shall be payable semiannual1y, on January 15 and July 15 of each year. The payment due . January 15 shall be for the first six months of the preceding Activity Year and the payment due July 15 shall be for the second six months of the preceding Activity Year. Upon termination of this Agreement, all payments due to the City under Paragraphs c, d and e of this Section 5 shall be paid no later than thirty (30) days after the effective date of termination, HCA shall be entitled to retain all net Event Revenues and Fundraising Events and Membership Revenues after payment of the amounts due to the City under this Section 5, and HCA shall pay all expenses related thereto. 6, Bank Accounts and Financial Reports, All sums received by RCA in connection with its programming and fundraising duties under Sections 2 and 3 of this Agreement shall be deposited into a bank account maintained by RCA. HCA agrees that it shall maintain an accounting system for the bank account into which the sums received by it in connection with its programming and fundraising duties are deposited that complies with so-called "non-profit" or "fund accounting" accounting requirements and procedures, including itemizing by fund designation different categories of receipts and expenses, The City shall at all times by entitled to receive copies of all banks statements, books and records related to the bank account so established by RCA and HCA shall deliver such copies to the City upon request No later than ninety (90) days after the end of each Activity Year during the term of this Agreement, RCA shall cause its certified public accountant to prepare, in accordance with generally . accepted accounting principles, and deliver to the City a compiled annual financial report of the c: Hopcivil\AgrcementHopkinsHCA- 10 - . programming activities and fund raising activities performed by HCA under this Agreement Within ninety (90) days following the termination of this Agreement, HCA shall also deliver to the City a compiled financial report for the year of termination complete through the date of termination, HCA agrees that the City shall have the right to inspect, audit and receive copies of all books, records, bank statements and other documents related to or evidencing HCA's programming and fundraising activities and duties under this Agreement, and HCA agrees to give the City or its representatives access to HCA's records for that purpose, 7, Insurance and Indemnification. a, Insurance. The City shall maintain casualty insurance coverage for the Facility, with coverage limits, terms and conditions as determined by the City in its sole discretion. HCA shall not be named as an additional insured in the City's casualty insurance policies. HCA shall maintain fire and extended coverage casualty insurance insuring all personal property of HCA that is located within the Facility and personal property of third parties that is consigned or entrusted to ReA for display purposes within the Facility. Such fire and extended coverage casualty insurance to be maintained by RCA at its sole expense and shall name the City as an additional insured. The City and HCA shall each maintain comprehensive general liability insurance providing coverage for claims arising from the operation of the Facility and (in the case of HCA) the performance of HCA's duties and responsibilities under this Agreement The coverages and liability limits for the comprehensive general liability . insurance to be maintained by the City shall be as determined by the City in its sole discretion. The comprehensive general liability insurance to be maintained by RCA shall provide for limits of coverage of not less than $1,000,000.00 combined single limit coverage. The City shall be named as an additional insured on the comprehensive general liability insurance policy to be maintained by RCA The City and RCA agree that they shall provide one another with certificates evidencing the insurance coverages that they are required to maintain by this Agreement, which certificates will provide for thirty (30) days' prior written notice to any party named as an additional insured prior to cancellation of the applicable policy. RCA acknowledges that it has been advised the City does not maintain liability insurance in excess of the statutorily imposed liability limit of $1,000,000,00, and that RCA is solely responsible for insuring itself against all risks associated with the performance of its duties under this Agreement As provided in Section 4 of this Agreement, the City shall provide all Worker's Compensation insurance and other insurance to be provided on behalf of the City employees and staff whose services are to be used by ReA pursuant to Section 4. b, Indemnification. Except to the extent such claims, damages and liabilities are covered by insurance maintained by the City, RCA agrees that it shall indemnify and hold the City harmless from and against any and all claims, damages and liabilities arising out of: i) Any failure ofRCA to perform any of its obligations under this Agreement; . ii) Any acts ofRCA or its agents or representatives beyond the scope of the agency and C:Hopcivil\AgrecmentHopkinsHCA- 11 - -----.. . authority specifically granted to HCA under this Agreement; and iii) The negligence or intentional misconduct ofHCA, its agents or representatives other than the City employees to be provided to RCA under Section 4 of this Agreement, Except to the extent such claims, damages and liabilities are covered by the insurance HCA is required to maintain under Paragraph a" above, the City shall indemnify and hold RCA harmless from and against any and all claims, damages and liabilities arising out of the operation, ownership, leasing and maintenance of the Facility. Other than those arising out of the matters described in Subparagraphs i), ii) and iii) of this Paragraph 6,b. 8, Miscellaneous provisions. a, The captions and headings used in this Agreement are used for convenience only and shall not be used in construing or interpreting the provisions of this Agreement b, Any notice, demand or other communication required or permitted to be given hereunder shall be deemed delivered and effectively given when delivered personally to the representatives of the City and HCA identified below or one (1) business day after being mailed by registered or certified mail, return receipt requested, addressed as follows: . To City: City of Hopkins Attention: City Manager 1010 First Street South Hopkins, MN 55343 To HCA: Hopkins Center for the Arts, Inc, Hopkins Center for the Arts, Inc Attention: HCA, Inc Board Chair Attention: Executive Arts Director 1111 Mainstreet 1111 Mainstreet Hopkins, MN 55343 Hopkins, .MN 55343 Either party may change its address or the identity of its designated representative named above by written notice to the other party in the manner stated in this paragraph. c, HCA is an independent contractor of City, and shall act only pursuant to and in accordance with the terms of this Agreement No provision of this Agreement, nor any acts of the parties hereto, shall be deemed to create a partnership or joint venture between the City and HCA d. There are no third party beneficiaries of this Agreement, intended or otherwise, e, This Agreement represents the entire Agreement between the City and HCA with respect to its subject matter, and supersedes all prior agreements between the parties related to the . subject matter of this Agreement, including the Cooperative Agreement Any amendment to C:Uopcivil\AgreementHopkinsHCA- 12 - . this Agreement must be in writing and signed by both parties. f HCA may not assign its rights or responsibilities under this Agreement without the prior written consent of the City, which consent may be withheld in the City's sole discretion, Subject to such limitation concerning assignment, this Agreement shall be binding upon and inure to the benefit of the City, HCA and their respective representatives, successors and assIgns. g, HCA agrees that it shall comply with all state and federal codes, statutes, rules, regulations and ordinances applicable to the performance of its duties and responsibilities under this Agreement, h, In the event any claim, action or proceeding is filed or initiated to enforce the provisions of this Agreement, the prevailing party in such claim, action or proceeding shall be entitled to recover such parties' reasonable attorney's fees as determined by a court or arbitrator, I. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Minnesota. J. Each and every provision of this Agreement is intended to be severable, If any term or provision hereof is determined to be illegal or unenforceable for any reason whatsoever, such term or provision shall be severed from this Agreement, and shall not affect the validity of . enforceability of the remaining terms and provisions of this Agreement k HCA acknowledges and agrees that it is familiar with the provisions ofthe Leases with Stages and District 270 and, in addition, with the provisions of that certain Grant Agreement End Grant, dated April 1, 1997, between the City and the State of Minnesota Department of Administration (the "Grant Agreement"), HCA agrees, in the performance of its duties under this Agreement, that it shall not violate any Agreement, term, covenant, condition or requirement of such Leases or the Grant Agreement Without limitation of the foregoing provisions of this Paragraph k, HCA shall comply with the provisions of Section 3,03 of the Grant Agreement, including Paragraph I. thereof, which requires HCA, for one (1) year from the date of this Agreement, to list any vacant or new positions HCA may have with job services of the Commissioner of Economic Security of the State of Minnesota, or the local service units, as required by Minn. Stat 268,66, Sub d, 1, as the same may be subsequently amended, modified or replaced, I. Any and all documents, records and data created, collected, received, stored, used, maintained or disseminated by HCA in performing the duties and functions assumed by it under this Agreement are subject to the requirements of the Government Data Practices Act, Minn. Stat Chapter 13, and HCA acknowledges and agrees that, by entering into this Agreement, it shall comply with the requirements of Minn. Stat Chapter 13 as ifit were a governmental entity subject to such requirements, . C:Hnpcivil\Agr~~lIIelllHopkjnsHCA- 13 - . m, During the term of this Agreement, HCA agrees that its Bylaws shall provide that at least one-third of its board of Directors members shall be Hopkins residents. No provision of this Agreement shall, however, be construed as granting the City control over the governance, existence or operation ofHCA which, at all times, shall remain fully independent of the City, IN WITNESS WHEREOF, the City and HCA have executed and entered into this Agreement effective as of the date first above written, CITY OF HOPKINS, MINNESOTA HOPKINS CENTER FOR THE ARTS, INC. By By Its Its By By Its Its . . C:llopcivil\AgrccmentJlopkinsHCA- 14 -