CR 2000-155 Approval Of the Hopkins Center For Arts Cooperative Agreement
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. September 14, 2000 o P K \ '" Council Report 2000-155
Approval of the Hopkins Center for Arts
Cooperative Agreement
Proposed Action
Staff recommends adoption of the following motion: Move to approve the Hopkins
Center for the Arts Cooperative Aqreement and direct staff to execute the aqreement
with Hopkins Center for the Arts, Incorporated.
Overview
In November of 1999 the first draft of what is now the Hopkins Center for the Arts
Cooperative Agreement was created. Since that time there have been eight re-
drafting's of the document as a result of numerous meetings to gather input from
council members, operations board members, staff and the City Attorney. The final draft
of the Cooperative Agreement included in this Council Report has been approved by
the Operations Board and is approved by the City Attorney. Staff requests that the City
Council approve the document and direct staff to execute the agreement with HCA, Inc,
. Primary Issues to Consider
How does the Cooperative Agreement positively impact the Arts Center?
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. What are the terms of the agreement?
SupportinQ Information
. Overview of key points of the Cooperative Agreement
. Hopkins Center for the Arts Cooperative Agreement
Financial Impact $ Budgeted: Y/N N Source:
Related Documents (CIP, ERP, etc,):
Notes: Goal is to have revenues exceed totals received in past years from HAM
lease and City staff proqramminq efforts
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. Council Report 2000-155
Page 2
Primary Issues to Consider
. How does the Cooperative Agreement positively impact the Arts Center?
The Cooperative Agreement improves the potential of the Arts Center in the following
areas:
. Programming- By having the City concentrate on it's facility and landlord
responsibilities at the Arts Center, and HCA, Inc. concentrating on
programming, there will be better clarity, vision and focus on programming.
HCA, Inc. as a 501c3 will be in a better position to benefit from program
based grants, sponsorship and donations
. Fundraising- HCA, Inc. as a 501c3 will have better opportunities to benefit
from fundraising activities, as opposed to the City to whom people are Jess
likely to donate to because of the City's ability to tax. HCA, Inc as a part of the
Cooperative Agreement is also required to have at least one major fundraiser
per year,
. Membership - Membership builds community relationships and the Arts
Centers' mission is "to build community through the arts", HCA, lnc" through
. its programming focus, extensive volunteer program, and 501 c3 status will be
able to attract a large membership.
. Financial- The ability of HCA, Inc. attract contributed funds should increase
the net revenues in the Arts Center budget even at the SO/50 split of excess
revenues per Cooperative Agreement.
. What are the terms of the Cooperative Agreement?
As the name implies, cooperation is required by both parties to the agreement. In the
event that the City or HCA, Inc. feels that there are situations that need to be addressed
under the agreement both parties would cooperate in addressing the situation. In the
event that the City or HCA, Inc. find the situations cannot be corrected, the terms of the
agreement may become very important.
Once the agreement is signed it continues indefinitely. Either party in the event of the
other parties' default in performance may terminate the agreement if the default is not
corrected in 30 days. Either party may terminate the agreement at any time, without
cause with 90 days prior written notice.
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. Cooperative Agreement Summary
Attached is a copy of the Hopkins Center for the Arts Cooperative Agreement. This is a
summary of the various sections contained in the document. The section summaries are
intended to help clarify key points and assist in the understanding of the intent of each
section.
Recitals (page 1)
The recitals contain general language that state both fact and intent. The recitals recognize
that: the City owns the facility, Hopkins Center For the Arts Association (HCA) is a tax
exempt 501 (c)(3), both parties agree that arts related uses of the facility take priority, and
that both parties agree to enter into the terms and conditions of the agreement.
1. Retention and Term (page 2)
This section states that the agreement begins on the date of signature, and continues
indefinitely until terminated by either party. The agreement can be terminated as follows: 1)
either party may terminate this agreement in the event the other party defaults in the
performance of its obligation under this agreement, and such default is not corrected within
thirty (30) days of written notice to the defaulting party: 2) Either party may terminate this
agreement at any time, without cause upon ninety (90) days prior written notice to the other
party.
. The balance of this section speaks to the exchange of records and revenues in case of a
termination of the agreement.
2. Programming Duties of HCA (Page 3)
This section recognizes HCA as the Art Center programmer in this agreement being
responsible for the scheduling, conducting and administration of events.
Sub-section (a) gives recognition to the existing meet and confer process for time allocation
between the major tenants and the City.
Sub-section (b) states how the hours allocated to the City and the unallocated hours are
divided between the City and HCA. In summary, the section allocates the hours as follows:
First, the City reserves hours for recurring annual arts events, such as, spring dance
recitals, John Ireland School plays and concerts, etc.
Second, HCA reserves dates for events and programming
Third, the City reserves dates for "occasional users" and non-arts activities, such as
Rotary, business rentals, receptions, etc. Note: The Raspberry festival activity dates
are protected in the leases with the tenants, so those dates are secured before this
sections division of dates.
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. Fourth, the City reserves dates to achieve objectives to be set forth in a community
use directive,
The balance of the sub-sections state that HCA will negotiate, administrate, and enforce
contracts on their own behalf. HCA will be entitled to the use of City employees (covered
more thoroughly in section 4). The SO/50 split of excess revenues between the City and
HCA is defined. Sub-section (h) states that sixty (60) days after the end of the Activity Year,
HCA will provide an itemized accounting of Event Revenues and Event Expenses to the
City. It is stated that the City is responsible for the facility and leases, Finally, Sub-Section U)
states that HCA agrees to assign contracts over to the City, if the City so desires, in the case
of termination of this agreement.
3. Fundraising Functions of HCA (Page 6)
This section states that HCA will assume the primary responsibility for all fundraising
activities including membership enrollments, contributions, bequests and grants. The section
goes on to explain that the City will dedicate it's portion of shared revenues to expenses
related to facility, operations and facility debt. HCA will be required to have one annual
fundraising event and HCA may use the name "Hopkins Center for the Arts" in connection
with its fundraising activities. The balance of the section defines the SO/50 split of fundraising
excess revenues and the reporting necessary to the City, State and IRS in relation to
fundraising activities. The final sub-section (k) gives the City the right to do fundraising
provided the City does so in good faith and shall not interfere with the fundraising efforts of
. HCA under this agreement.
4. Use of City Employees (page 8)
This section states that HCA shall be entitled to forty (40) hours per week of City staff
services at no charge to HCA. This may be the service of the Arts Coordinator, Scheduling
Coordinator and the Facilities Manager. The Facilities Manager will determine which City
employees are available to HCA. The City retains all employment authority and City
employees can only be used for purposes of performing the duties and responsibilities of
this agreement. The City agrees to provide employees that are quaHfied and competent to
fulfill the objectives of this agreement.
5. Expenses and Division of Revenues (page 10)
This section defines what are considered events and fundraising expenses and revenues
and then goes on to define the division of the excess revenues and space usage fees.
Excess revenues will be split SO/50 between the City and HCA. HCA will pay a fee for use of
space at the Art Center. The fee is calculated as a percentage of the expense budget for
each activity. The percentages are 5% of the expense budget for main theater usage and
10% of the expense budget for other space usage.
The City also agrees to advance up to $10,000 interest free, to HCA as start up capital for
event and fundraising expenses. HCA is required to repay the amount of advance that
exceeds $5,000 on the first anniversary of the agreement, and repay the balance of
. advanced funds 6 months after the first anniversary,
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. 6. Bank Accounts and Financial Reports (page13)
This section states that HCA will have their own bank account for their business activities
and ninety (90) days after the end of each activity year HCA must deliver a compiled annual
financial report to the City,
7. Insurance and Indemnification (Page 14)
This section defines the types and amounts of insurance required by the City and HCA. It
also cross indemnifies the City and HCA, so that each party is held harmless from and
against claims, damages and liabilities arising from failure to perform, acts of third parties,
and negligence or intentional misconduct by the other party to the agreement.
8. Miscellaneous Provisions (page 15)
This section contains the legal language that identifies HCA as an independent contractor of
the City, prohibits third party beneficiaries, prohibits assignment of the agreement, and other
legal requirements.
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Drafted 9/7/00 HOPKINS CENTER FOR THE ARTS
. COOPERATIVE AGREEMENT
THIS AGREEMENT is made and entered into effective as of the _ day of
,2000, by and between the City of Hopkins, a municipal corporation under the
laws of Minnesota ("City") and Hopkins Center for the Arts Association, 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. HCA 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 foster community appreciation for and involvement in the arts.
C. The City and RCA share the common objective offostering community appreciation for
and involvement in 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. The City and HCA have agreed to enter into this Agreement for the purpose of stating
the terms and conditions under which the parties will cooperate in the programming and fundraising
functions for the Facility and HCA will perform the programming and fundraising functions
described in this Agreement. In furtherance of its mission and purpose, HCA has agreed to assume
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. those functions, subject to the terms and conditions stated in this Agreement.
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 HCA
agree as follows:
1. Retention and Term. The City and HCA hereby enter into this Agreement, and the City
retains HCA to perform, and HCA 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 ofthe 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 of HCA pertaining
to the Facility and its operation and the performance ofHCA's duties and responsibilities under this
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
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. operation of the Facility or the continued performance of the duties and responsibilities formerly
performed by HCA. HCA 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
ofHCA'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. Programin~Duties ofHCA. During the term of this Agreement and subject to its terms
and conditions, RCA shall work cooperatively with the City and shall be responsible for scheduling,
conducting and administering certain concerts, performances, receptions, visual arts display,
community arts programming and other events (collectively "HCA Events") in the Facility during
those times and using those spaces within the Facility that are available for such use by the City. The
following terms and conditions shall apply to the performance of HCA's duties with respect to
programing HCA Events:
a, HCA 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. HCA acknowledges
that the availability to the City of dates and spaces within the Facility is limited by the Leases
and that HCA Events may only be scheduled during the times and dates and using the spaces
available to the City under those Leases. Further, HCA agrees that it shall participate with
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. 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 HCA 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 HCA agree that only certain of the Usage Dates shall be available for
scheduling HCA 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, visual arts displays,
community arts programming and other arts-related events (collectively "City Events") in
the Facility that do not require sponsorship, participation, incentives or promotion by HCA.
The City and HCA 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 HCA Events by HCA. 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.
e Second, the Usage Dates shall be available for programming and scheduling ofHCA
Events by HCA to the end that the maximum revenue shall be derived from
scheduling and programming HCA Events consistent with the provisions of this
Agreement.
Third, the Usage Dates shall be available for programming and scheduling City
Events and to be reserved by the City for "occasional user" functions and non arts-
related functions 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, and the Usage Dates reserved
for such functions and events shall not be available for programming ofHCA Events.
Fourth, the City and HCA shall seek to achieve and foster certain community use
objectives to be established by the City and identified to HCA..
The City and HCA shall work cooperatively with one another to allocate the Usage 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 HCA shall engage in
a similar process for the purpose of allocating and designating the Usage Dates to be reserved
by Of 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
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. 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 HCA Events under this Agreement.
c. The terms and conditions of all contracts and agreements related to RCA Events arranged
and booked by RCA under this Agreement shall be negotiated and determined by RCA, 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 RCA. RCA shall deliver
copies of all contracts and agreements for RCA Events to the City within two (2) business
days of execution thereof.
d. HCA shall be responsible for the administration and performance of all contracts and
agreements related to RCA 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 RCA
Events, and arranging for all services and staffing (including ticket sales and collection) to
be provided during RCA Events. Event Expenses (as defined in Paragraph 5.a. of this
Agreement) shall be paid in the manner stated in Section 5. of this Agreement.
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. All
. attorney's fees and other expenses incurred in connection with the enforcement of such
contracts shall be included in the Event Expenses defined in Paragraph 5.a. of this
Agreement.
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 HCA 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. The sole consideration or payment to either party with respect to or as
a result of the scheduling, conduct, administration or performance of HeA Events or any
services provided by HCA in relation thereto shall be each party's (fifty) 50% annual share
of Excess Cooperative Revenues specified and defined in Section 5 of this Agreement.
h. HCA shall provide the City upon request with copies of all statements, invoices, billings and
other documents evidencing Event Expenses. 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 all RCA Events arranged and/or
administered by the RCA under this Agreement for the preceding Activity Year, detailing
. all Event Revenues and Event Expenses in a format approved by the City. In the event this
Hopci v i I\man agement3 a,art 5
. Agreement is terminated before the end of an Activity Year, HCA 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 ofHCA 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 HCA by this Agreement. The
rights, responsibilities and authority retained by the City shall specifically 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 HCA
to assign all of its right, title and interest in all contracts and agreements for HCA Events to
the City, upon written notice to HCA given within thirty (30) days of service of Notice of
Termination under Section 1 of this Agreement. HCA 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.
3. Fundraisin~ Functions Of HCA. During the term of this Agreement, HCA shall work
cooperatively with the City and assume primary responsibility for all fundraising activities for the
. benefit of the Facility and HCA in accordance with the provisions of this Agreement and, in that
capacity, shall solicit, apply for and obtain membership enrollments, contributions, bequests and
grants for the uses and purposes stated below. HCA shall perform these fundraising activities
subject to the following terms and conditions:
a. The membership enrollments, grants, bequests, gifts, contributions and other payments
obtained by HCA, as a result of fundraising activities for the benefit of the Facility and ReA
in accordance with the provisions of this Agreement are hereinafter referred to as the
"Fundraising and Membership Revenues." The City and HCA agree that the Fundraising and
Membership Revenues shall be used to pay the "Fundraising Expenses" defined and
identified in Paragraph a. of Section 5 of this Agreement, and that the balance of the
Fundraising and Membership Revenues shall be divided and distributed to the City and the
HCA as specified in Section S of this Agreement. The City's share of Excess Cooperative
Revenues, if any, under Paragraph S.c. of this Agreement, shall be dedicated to and used for
the operation, maintenance, repair and improvement of the Facility and for promoting and
conducting City Events and activities consistent with the priorities described in Paragraph
2.b., of this Agreement. The uses and purposes for which the City's share of Excess
Cooperative Revenues are dedicated include, but are not limited to: i) all operating and
. maintenance expenses of the Facility, of whatever kind or nature, including, but not limited
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. to, employment costs for City employees, insurance premiums, utility charges, maintenance,
repair and cleaning, and fees of attorneys, accountants and other consultants employed by the
City; ii) debt service, including principal and interest, on any financial obligations the City
related to the acquisition, construction and operation of the Facility; iii) depreciation; and
iv) capital improvements and repairs to the Facility (including funding of a capital
improvement reserve account). Subject to the provisions of Paragraph S.b. of this
Agreement, the City shall have the exclusive right to determine and designate which of the
foregoing uses and purposes the proceeds of enrollments, grants and contributions shall be
used for, provided that any grant or contribution that is specifically designated or dedicated
for a particular use or purpose by the grant-making agency or donor shall be used for such
designated purpose.
b. RCA shall diligently pursue and actively solicit Fundraising and Membership Revenues to
the end that the maximum possible revenues shall be obtained from such fundraising
activities. The fundraising duties assumed by RCA under this Agreement shall include
conducting an annual fundraising event at the Facility, grant writing, research, advertising,
correspondence, promotion of the arts related activities of the Facility, correspondence,
conducting fundraising activities and soliciting membership enrollment contributions 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 grants, contributions, bequests and membership enrollments obtained by HeA under this
Agreement shall be payable to "Hopkins Center for the Arts." RCA shall disclose to all
donors and members that such grants, contributions, bequests and membership enrollments
are dedicated to the uses and purposes identified in this Agreement.
e. All grants and contributions obtained by HCA under this Agreement shall be deposited and
accounted for as provided in Section 6 of this Agreement. HCA shall deliver to the City
copies of all statements, invoices and billings for costs and expenses related to fundraising
activities conducted pursuant to the terms of this Agreement. 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. RCA shall also provide the City 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
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Hopci vi l\management3a.art 7
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. or its status as a tax exempt organization under Section 501(c)(3) of the Internal Revenue
Code.
f. No later than sixty (60) days after the end of each Activity Year during the term of this
Agreement, HCA shall deliver to the City a detailed, itemized accounting of all Fundraising
and Membership Revenues and expenses 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
the an Activity Year, HCA shall provide the accounting required by this paragraph f, no later
than sixty (60) days after the date of termination of this Agreement.
g. HCA shall 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,
returns, disclosures and records shall be promptly delivered to the City,
h. It is the intention of the parties that all membership enrollments, grants and contributions
obtained by HCA as a result of its fundraising activities shall be tax deductible. To that end,
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 the expenses that it incurs in performing its fundraising activities under this
Agreement in the manner provided in Section 5 of this Agreement. The sole consideration
or payment to either party with respect to or as a result of the Membership and Fundraising
Revenues or the performance ofHCA's fundraising activities under this Section 3 shall be
each party's (fifty) 50% annual share of Excess Cooperative Revenues specified and defined
in Section 5 of 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 shall do so in good faith and shall not
materially interfere with the fundraising activities to be performed by HCA under this
Agreement.
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. 4. Use of City Employees. 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 Facility Manager,
Arts Coordinator 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
HCA.
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 all 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 employees identified above shall be available to the HCA for a cumulative total of no
more than forty (40) hours per week. The use of City employees by the HCA shall be upon and
subject to the following additional terms and conditions:
a. The City's Facility Manager 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 Facility Manager's determination in this
. regard shall be final.
Hope iv il\managemenGa, art 9
. Section 4(f)
It is agreed that there should be a communication between HCA and the City to
determine if the goals and objectives of HCA are being met be the employee assigned
to work with H CA.
The HCA, Inc/employee relationship and the Operations Board/employee relationship
are legally quite different.
In the case of the Operations Board, this Board is an arm of the City and thus can act in
a direct employer/employee relationship.
In the case of HCA, the employee/board relationship is really that of an independent
contractor. The Arts Coordinator is an independent contractor of HCA. This being the
case, there are certain employee/employer areas HCA, jf they were to enter into, could
imply they are an employer. Direct performance evaluation would be one of these
areas. If HCA performs employer responsibilities, they could open the door for an
employee to file for unemployment, workers compensation, etc. if the employee were to
prove HCA was performing employer's responsibilities.
The City Attorney is recommending, for all partIes' protection, that HCA provide a
statement of goals and objectives that would be reviewed periodically by the HCA board
and the City. If the goals and objectives were not being met then the Board and City
. would determine if there is a performance problem or if the goals and objectives need
adjustment. Appropriate action would then be taken to remedy the situation.
Example of performance situation:
The Board set a membership goal to have X number of members by year -end as a part
of their goals and objectives. It has become apparent, through lack activity (board
updates, reports), that the Arts Coordinator will not reach this goal. The Board stresses
to the Arts Coordinator that the goal needs attention and the Arts Coordinator agrees
that the goal is realistic, but there is still no activity. This appears to be a performance
issue and it will be dealt with when the board and Facilities Director review the goals
and objectives.
Example of goals and objectves adjustment:
The Board sets goals and objectives. The membership goal is not being met, but since
the goals and objectives were established there have been some tremendous
opprortunites, that placed high demand on the Arts Coordinators time, in the area of
grantwritting and fundraising. The Board agrees that the membership goal has suffered
because of other opportunities and is comfortable with not meeting the goal this year.
When the Board and Facilities Director meet, the board informs the Facilities Director
that the membership goal has been adjusted and there is no problem.
.
b. There shall be no charge to HCA 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 HCA without charge to
HCA.
r. The City agrees that HCA shall be entitled to require that the City employees to be
made available for use by the HCA shall be qualified to perform the services to be
provided by HCA under this Agreement and otherwise competent to fulfill the
objectives ofthis Agreement. To that end, RCA may periodically prepare and deliver
to the City a statement of goals and o~jectives 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 HCA.
. 5. Expenses and Division of Revenues. Payment of expenses and consideration for the
services performed by HCA under this Agreement shall be made and distributed as follows:
a. Definitions: In addition to the words and phrases defined elsewhere in this Agreement,
which 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.
"Cooperative Revenues" shall mean and refer to, collectively, all of the Event Revenues and
the Fundraising and Membership Revenues.
"Event Expenses" shall mean and refer to:
i) all reasonable and necessary fees, costs and expenses due to third parties related to
scheduling, programming, conducting, enforcing or administering HCA Events and contracts
for HCA Events under this Agreement, including, but not limited to, advertising and
promotional expenses, printing and postage, insurance premiums, attorney's and accountant's
fees, fees and expenses due to independent contractors, any excess Fundraising Expenses
. identified in Paragraph b. of this Section and all other reasonable and necessary costs and
Hopciv i l\managementJ a, art 10
expenses of whatever kind or nature associated with the performance ofHCA's duties under
. this Agreement related to HCA Events;
ii) all payments and other sums due to performers or other persons performing HCA Events;
and
iii) a space usage fee due and payable to the City in the amount of: aa) five percent (5%) of
the amount of the fees, costs, expenses and payments identified in clauses i) and ii) for HCA
Events in the large theatre space; and bb) ten percent (10%) of the amount ofthe fees, costs,
expenses and payments identified in clauses i) and ii) for RCA Events that do not use the
large theatre space. HCA agrees that such space usage fee shall be due and payable to the
City for each HCA Event within thirty (30) days of the final performance of such HCA
Event.
iv) reimbursement of the advances to be made by the City under Paragraph 5.b.v. of this
Agreement.
"Event Revenues" shall mean and refer to all revenues, ticket receipts, payments,
concessions, rents, royalties sponsorship and advertising payments and other income derived
from HCA Events scheduled and administered by HCA under Section 2 of this Agreement.
"Fundraising Expenses" shall mean and refer to all reasonable and necessary fees, costs and
. expenses related to conducting, performing and administering the fundraising activities of
HCA described in Section 3 ofthis Agreement, including but not limited to, advertising and
promotional expenses, printing and postage, attorney's and accountant's fees, fees and
expenses due to independent contractor's, any excess Event Expenses identified in Paragraph
b. of this Section and any and all other fees, costs and expenses of whatever nature associated
with the performance ofHCA's fundraising duties under this Agreement, including a space
usage fee due and payable to the City equal to ten percent (10%) of the foregoing Fundraising
Expenses for all fundraising programs and events that are conducted in and use space within
the Facility. Fundraising Expenses shall also include reimbursement of the $10,000.00
advance made by the City under Paragraph 5.b.v. of this Agreement. Costs or benefits
payable to or for the benefit of employees, officials or other representatives ofHCA shall not
be included in the Fundraising Expenses.
"Fundraising and Membership Revenues" shall mean and refer to the "Fundraising and
Membership Revenues" defined and identified in Paragraph a, of Section 3 of this
Agreement.
b, Payment of Expenses. The Event Expenses and the Fundraising Expenses shall be paid as
follows:
.
Hopciv il\management3a, art 11
. i) The Event Expenses shall be paid from the Event Revenues. This payment shall
include the space usage fee payable to the City as specified in Paragraph a of this
Section 5.
ii) To the extent the cumulative Event Revenues for any Activity Year during the term
of this Agreement are not sufficient to pay the cumulative Event Expenses for such
Activity Year, the excess Event Expenses shall be included in and paid as part of the
Fundraising Expenses, provided that certain Fundraising and Membership Revenues
that are restricted to certain uses or purposes by the donor shall only be used for such
uses and purposes. Upon termination of this Agreement, there shall be a final
accounting of the Event Expenses and Event Revenues for the partial Activity Year
through the date of termination, and the Event Expenses for such partial Activity
Year shall be paid as specified above.
iii) The Fundraising Expenses shall be paid from the Fundraising and Membership
Revenues.
iv) To the extent the cumulative Fundraising and Membership Revenues for any
Activity Year during the term of this Agreement are not sufficient to pay the
cumulative Fundraising Expenses for such Activity Year, the excess Fundraising
Expenses shall be included in and paid as part of the Event Expenses. Upon
termination of this Agreement, there shall be a final accounting of the Fundraising
. Expenses and Fundraising and Membership Revenues during the partial Activity
Year tluough the date of termination, and the Fundraising Expenses for such partial
Activity Year shall be paid as specified above.
v) The City agrees that it shall advance an amount not to exceed $10,000.00 to RCA
to pay Event Expenses and Fundraising Expenses until a sufficient amount of
Cooperative Revenues have been received to defray Event Expenses and Fundraising
Expenses, Said $10,000.00 shall be advanced to HCA and repaid to the City, without
interest, on the following terms and conditions:
aa) For a period of 365 days from and after the date of this Agreement, the City
agrees that it shall make advances of cash to RCA in a cumulative amount
not to exceed $10,000,00 for the purpose of defraying Event Expenses and
Fundraising Expenses upon request by HCA designating the amount of such
advance.
bb) RCA shall repay all of such advances that exceed the sum of $5,000.00 on
the first anniversary date of this Agreement, provided the City may, in its sole
discretion, consider extending such initial repayment date for a period not to
exceed 180 days upon such terms and conditions as the City may determine.
.
Hopcivil\management3a,art 12
. cc) The balance of all amounts advanced by the City to HCA shall be repaid, in
full, on the first business day that is 180 days after the first anniversary date
of this Agreement.
c. Division of Excess Cooperative Revenues. The sole consideration or payment to either party
with respect to or as a result of: the scheduling, conduct, administration or performance of
HCA Events or any services provided by HCA in relation thereto; or the Membership and
Fundraising Revenues or the performance ofHCA's fundraising activities under Section 3
of this Agreement shall be determined and distributed as follows:
To the extent the Cooperative Revenues for the immediately preceding Activity Year
exceed the cumulative total of the Event Expenses and Fundraising Expenses for
such Activity Year (such excess Cooperative Revenues being herein referred to as
"Excess Cooperative Revenues"), such Excess Cooperative Revenues shall be
divided between and distributed to the City and HeA, as follows:
The City shall receive 50% of the Excess Cooperative Revenues.
HCA shall receive 50% of the Excess Cooperative Revenues.
The Excess Cooperative Revenues, if any, for each Activity Year during the term of this
Agreement shall be distributed to the City and HCA, annually, no later than sixty (60) days
. after the end of each Activity Year in the percentages stated above. Such excess Cooperative
Revenues shall be distributed in arrears, based on the Excess Cooperative Revenues for the
preceding Activity Year, but only to the extent of Cooperative Revenues actually collected.
Upon termination of this Agreement and delivery ofthe accountings required by Paragraphs
2.h. and 3.f. of this Agreement, the Excess Cooperative Revenues, if any, for the year of
termination shall be distributed to the City and HeA, no later than thirty (30) days after
delivery of such final accountings.
6, Bank Accounts and Financial Reports. All sums received by HCA in connection with
its programming and fundraising duties under Sections 2 and 3 ofthis Agreement shall be deposited
into a 5epalate bank account maintained by HCA. fOI that pUlpose, IleA .shall not cOhuninglc the
fuuds depo!>ited in the bank aCC01l11t to be established unde! tillS Section G with othCI funds of! lCA,
and HCA agrees that it shall maintain an accounting system for the bank account into which the
stuns 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,
.
Hopciv i (\management3 a ,art 13
..
. incIudmg 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 HCA, 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, HCA 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
programming activities and fundraising 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 oftermination 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 HCA for display purposes within the Facility. Such fire and
extended coverage casualty insurance to be maintained by HCA shall name the City as an
additional insured, and the costs of maintaining such insurance shall not be an Expense
reimbursable to RCA under the provisions of Paragraph 5,a. ofthis Agreement. 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 ofHCA' 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 HCA shall provide for limits of coverage of not less than
. $1,000,000.00 combined single limit coverage. The City shall be named as an additional
insured on the comprehensive general liability insurance policy to be maintained by HCA.
Hopcivillmanagement3a,art 14
~
. The City and HCA agree that they shall provide one another with certificates evidencing the
insurance coverages that they are required to maintain by this Agreement, which certificates
will provide for thirty (30) days' prior written notice to any party named as an additional
insured prior to cancellation of the applicable policy. HCA acknowledges that it has been
advised the City does not maintain liability insurance in excess of the statutorily imposed
liability limit of$l ,000,000,00, and that HCA is solely responsible for insuring itself against
all risks associated with the performance of its duties under this Agreement. As provided in
Section 4 ofthis 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 HCA pursuant to Section 4.
b. Indemnification. Except to the extent such claims, damages and liabilities are covered by
insurance maintained by the City, HCA 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 of HCA to perform any of its obligations under this Agreement;
ii) Any acts of RCA or its agents or representatives beyond the scope ofthe agency and
authority specifically granted to RCA under this Agreement; and
iii) The negligence or intentional misconductofHCA, its agents or representatives other
than the City employees to be provided to HCA under Section 4 ofthis 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 HCA
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 (l) business day after being
mailed by registered or certified mail, return receipt requested, addressed as follows:
To City: City of Hopkins
Attention:
1010 First Street South
Hopkins, MN 55343
.
Hope ivil\management3 a,art 15
--
.
,
. To HCA: Hopkins Center for the Arts
Attention:
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 ofthis 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 ofthis Agreement. Any amendment to 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.
1. 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 of the 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 ofMilU1esota Department of
Administration (the "Grant Agreement"). HCA agrees, in the performance of its duties under
Hopci \I i I\man agement3a, art 16
. .
. 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, Subd. 1, as the same may be subsequently
amended, modified or replaced.
1. Any and all documents, records and data created, collected, received, stored, used,
maintained or disseminated by ReA in performing the duties and functions assumed by it
under this Agreement are subject to the requirements ofthe Govenunent Data Practices Act,
Minn. Stat. Chapter 13, and RCA acknowledges and agrees that, by entering into this
Agreement, it shall comply with the requirements of Minn. Stat. Chapter 13 as if it were a
governmental entity subject to such requirements.
m. During the term of this Agreement, HCA agrees that its Bylaws shall provide that at least
one-third of its board 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 ofRCA 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
~N--::rf'l!..o( ~4rtr \-(J
By By
Its Its
By By
Its Its
.
Hopcivi l\managemenl3 a, art 17