SR-10-01-1985-11ECM:LCB:dvm
City Council Meeting 10/1/$5
TO: Mayor and City Council
FROM: City Staff
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OCT 1 1985
f` /
Santa Monica, California
SUBJECT: Recommendation to Authorize City Manager to Execute
Agreement with Santa Monica Convention and Visitors
Bureau
Introduction
This report recommends that the City Manager be authorized to
execute an agreement with the Santa Monica Convention and
Visitors Bureau for promotional activities of benefit to the
City.
Background
The City and the Bureau have had a prior agreement which was in
effect from November 15, 1982 until June 30, 1985. City staff.
and Bureau representatives have met and discussed potential
amendments to the previous agreement.
These discussions are concluded and the agreement being proposed
is substantially the same as the previous agreement. The two
principal modifications are noted below:
1) The term of the agreement is a minimum three years with
automatic extensions unless the City gives notice to
terminate.
It should be noted that there is some disagreement over
the option clause included in the proposed agreement.
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®,~
OCT ~ 1985
The copy attached to this report reflects the Bureau's
proposal. It states:
"Notwithstanding the foregoing, upon the expiration of
each contract year ( July 1 through June 30) the term
of this Agreement shall be automatically extended for
an additional year unless prior to expiration of the
contract year, the City Manager gives the Bureau
written notice indicating that the term of this
Agreement shall not be automatically extended as
provided herein."
Basically, this would result in a 2 year termination
notice.
A supplemental staff report from the City Attorney
addresses his concerns with this proposal.
2) The formula for annual City contribution to the Bureau
is adjusted to more closely track one percent of the
flow of transient occupancy tax revenues into the City.
Budget/Fiscal Impact
The current year's allocation of $302,863 called for in the
agreement is provided for in the 1985 - 86 City operating budget,
account #01-700-274-000-622.
Recommendation
It is recommended that the City Council determine the desired
option clause in the agreement and that the City Manager be
authorized to execute the agreement with the Santa Monica
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Convention and Visitors Bureau £or
terms as presented in this report.
Prepared by: Lynne C. Barrette
Assistant City Manager
Attachment
(SMCVB)
promotional services with
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This Agreement is made and effective this day of
October, 1985, by and between THE CITY OF SANTA NiONICA, a
California Charter City (hereinafter referred to as " City") and
the SANTA MONICA CONVENTION & VISITORS BUREAU, INC., a California
nonprofit corporation (hereinafter referred to as "Bur eau") with
reference to the following facts:
R E C I T A L S
A. City desires Bureau to provide services designed to
advertise and promote the interests of the City of Santa Monica
and its citizens by methods which, in the judgement of the
Bureau, will be of the greatest benefit to the people of the
City.
B. Bureau is willing to undertake the services hereinafter
set forth on behalf of the City for the purpose of promoting
tourism and travel to the City of Santa Monica.
NOW, THEREFORE, in consideration of the mutual promises and
agreements of the parties hereto, it is hereby agreed by and
between the parties as follows:
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1. The Bureau hereby agrees to provide the following
services to the City of Santa Monica:
(a) To maintain suitable quarters and employ competent
personnel to carry on the promotional activities enumerated
herein.
(b) To promote and invite trade and business meetings,
celebrations and conventions whereby businesses and individuals
from outside the City may become acquainted with the advantages
and opportunities available in the City.
(c) To encourage City-wide celebrations as are
determined by the Bureau and the City Council to be of
promotional benefit to the City.
(d) To operate a Convention & Visitors Bureau or
Visitor Center for the purpose of inviting, attracting and
welcoming tourists to the City, through the cooperative efforts
of the Bureau and the private and public sectors, through
advertising and promotion, and through services normally provided
for conventions.
(e) Cooperate with the City to utilize City facilities
to the fullest extent feasible.
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(f) Promptly answer all correspondence relative to
convention and visitor facilities in the City of Santa Monica,
and disseminate information by correspondence, newspaper
publicity and personal contacts favorably advertising such
advantages and opportunities.
(g) Prepare articles and news stories, compile data,
gather and assemble news items, photographs, printed materials
and brochures descriptive of the City's resources whereby
businesses and individuals outside of Santa Monica may be
encouraged to visit the City.
(h) To review the facilities and services, both public
and private, in the City of Santa Monica necessary to support
convention and visitor's activities and to advise the City of
problems and needed improvements for support of convention and
visitor activities.
(i) Generally, to promote convention and visitor
activities that will bring additional revenue to the City and to
businesses within the City.
(j) Furnish to the City Manager for his review and
approval an annual line-item budget for its entire operation.
(k) Furnish to the City an annual activity plan
containing programs and specific tasks. Said plan shall contain
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time-tables for the accomplishment of specific objectives for
each fiscal year.
(1) Furnish to the City an annual management
effectiveness report detailing the .extent to which the annual
activity plan for the previous year had been met. The annual
management effectiveness report shall be furnished to the City on
or before September 1st of each year.
(m) Furnish to the City quarterly disbursement
statements for the Bureau. These statements shall be submitted
no later than October 31, January 31, April 30, and July 31.
2. In consideration of the services enumerated in paragraph
1 above, the City shall make the following payments to Bureau:
(a) For fiscal year 1985/1986 and each fiscal year
thereafter, the City shall pay to Bureau the annual sum of
$256,612.50 (herein called the Bureau annual sum) augmented by an
amount equivalent to a growth factor. The growth factor is
determined as follows: The growth factor is a fraction. The
numerator shall be the difference between the forecast transient
occupancy tax revenue received by the City pursuant to Santa
Monica Municipal Code 6600 et seq. for the budgeted fiscal year
and the actual transient occupancy tax revenue received by the
City during fiscal year 1984/1985. The denominator shall be the
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actual. transient occupancy tax revenue .received. by the City
during fiscal year 1984-85 divided by the Bureau Annual Sum. If
the forecast transient occupancy tax is less than the 1984/1985
transient occupancy tax, then the growth factor is zero.
(b) For fiscal year 1985/1986, the growth factor is
stipulated to be $46,250.
(c) All payments made by the City to the Bureau shall
be made in equal quarterly payments not later than July 10,
October 10, January 10, and April 10, of each year, or on such
other basis as agreed to by the parties.
(d) All such funds shall be expended by the Bureau for
Bureau activities only as enumerated herein.
3. The Bureau shall not engage in any real property
development activities or any other activities not expressly
enumerated herein without the written approval of the City
Council.
4. Bureau shall not accept funding from sources other than
the City without the written approval of the City Council.
5. Nothing in this Agreement shall prevent: the Bureau from
requesting the appropriation of additional sums, or the City from
appropriating such sums, for specific projects which the City may
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desire to have performed by the Bureau and which the Bureau is
willing to perform.
6. One of the sources of general revenue the City
contemplates using to fund this Agreement is that provided for in
Municipal Code, Section 6bOlA. At its election, the City may
withhold any payments otherwise required by Paragraph 2 herein or
may immediately terminate this Agreement if a lawsuit is filed
against the City challenging the validity of Municipal Code,
Section 6610A. Notwithstanding the foregoing sentence, the City
shall pay to the Bureau such funds as are necessary to cover all
expenditures made or liabilities incurred by the Bureau pursuant
to its obligations under this Agreement and prior to receiving
written notice from the City of its election to withhold payments
or terminate this Agreement.
7. All records of the Bureau shall be open to inspection by
the City upon reasonable notice and during normal business hours.
Additionally, all minutes and other documents related to Board
meetings shall be available to the public.
8. The term of this Agreement shall be three years,
commencing on July 1, 1985, and ending on June 30, 1988, unless
terminated earlier as provided herein. Notwithstanding the
foregoing, upon the expiration of each contract year (July 1
through June 30) the term of this Agreement shall be
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automatically extended for an additional year unless prior to
expiration of the contract year, the City Manager gives the
Bureau written notice indicating that the term of this Agreement
shall not be automatically extended as provided herein.
9. (a) Prior to giving Bureau .written notice of
termination as contemplated in subparagraph (b) below, City shall
give to Bureau written notice of default specifying the nature of
the default and demanding cure thereof within 30 days, or in the
case of defaults not susceptible of being cured within said 30
day period, the notice of default shall request the Bureau to
take and continue action to cure such default with all reasonable
diligence until the same is cured but for not more than 90 days
from such notice. In tine event a default is cured within the
time provided in the notice of default, then no notice of
termination shall be given by the City to the Bureau. In the
event any default specified in a notice from City is not cured
within the time provided therefor, then City may terminate this
Agreement as provided in subparagraph (b).
(b) This Agreement may be terminated by either party by
giving six months written notice to the other party of intent to
terminate. Such notice to terminate may be given by the City or
the Bureau for good cause only and, in such event, the Agreement
shall continue in force for the balance of the fiscal year during
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which the notice to terminate is given. Any uncommitted or
unexpended budget funds at the end of such fiscal year shall be
returned by the Bureau to the City.
10. The Bureau acknowledges and agrees that it shall not
enter into any activity, transaction or undertaking which may be
construed, implied or inferred that the Bureau is acting in a
capacity of an agent or representative of the City. The Bureau
agrees to and shall hold the City, its officers, its agents,
employees and representatives harmless from and against any and
all claims, demands, losses, causes of action or liabilities
which may be based upon or arise out of, or in connection caith,
any claim by a third party that the Bureau has acted as the agent
or representative of the City thereby giving rise to a claim
against the City. City agrees that the Bureau is not now, nor
shall it ever be, the agent or representative of the City in any
activity, transaction or undertaking.
11. Bureau shall maintain such insurance and in such
reasonable amounts throughout the term of this Agreement as is
sufficient given its obligations hereunder. All policies of
insurance maintained by Bureau shall extend coverage to the City,
its elected and appointed Boards, Commissions, officers, agents,
employees and representatives. Bureau shall cause to be
furnished to the City certificates of insurance confirming that
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such insurance is in full force and effect and Bureau shall
notify City at least thirty (30) days prior to written notice of
cancellation, termination or modification of such insurance.
12. A11 written notices and demands of any kind which
either party-may. be .required or may desire _to serve :upon the
other in connection with the Agreement may be served either
personally, by registered or certified mail, or by first class
mail, postage prepaid addressed as follows:
To City: Mr. John Jalili
City Manager
City of Santa Monica
1685 Main Street
Santa Monica, Ca 90401
To Bureau: Santa Monica Convention
and Visitors Bureau, Inc.
2219 Main Street
Santa Monica, CA 90405
13. Neither the Articles nor the By-laws of the Santa
Monica Convention and Visitor's Bureau, Inc. may be amended or
otherwise changed without the written approval of the City
Council.
14. This Agreement constitutes the entire Agreement between
the parties hereto with respect to the subject hereof and may not
be modified, amended or otherwise changed in any manner except by
mutual consent of the parties.
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15. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the day and year first above indicated.
CITY OF SANTA MONICA, a
Municipal Corporation
By_
JOHN JALILI
City Manager
Approved as to Form:
ROBERT M. MYERS
City Attorney
SANTA MONICA CONVENTION &
VISITORS BUREAU, INC., a
California Non-Profit Corp.
By ~~,~'~,..e.~ cam,, ~. ~,
DONALD GIRAR
President
(cvbagree)
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CA:RMM:rmd079
City Council Meeting 10-7.-85
STAFF' RF.PQR"P
j~ 1(-,~
Santa Monica. Calitornia
TO: Mavor and C1 t.iT Council
FRC)M: City Attorney
St1BJEC"I': Agreement with Santa Monica Convention
and Visitors Bureau
"Phis Staff Reoort. outlines the concerns of the City
Attorney pertaining to Paragranh 8 of the proposed agreement
between the City and the Santa Monica Convention and Visitors
Bureau.
Paragranh 8 of the proposed rontrar..t provides:
The term of this Agreement shall
be three years, r..ommenr.,ing on July 1,
19£35, and ending on June 30, 19138,
unless terminated earlier as provided
herein. Notwithst.andina the
foregoing, upon the expiration of each
cont.racr year (July 1. through June
301, the term of this Agreement shall
he autgmatir.ally extended for an
additional year unless prior to the
expiration of the contract, year, the
City Manager gives the Bureau written
i
noT,ire indicating that the term of ~
1 p '° ((-
4CT 1 1965
this Agreement shall not be
automatically extended as provided
herP.tn.
The contract provides that at the end of ear.h contract
year, uni.ess the City affirmaT.avely gf.ves notice to the
Bureau, the contract is renewed as a three year contract, If
theCi,t,y dyes give ngtifir_atian prior to the expiration of the
contract. year; two more years remain on the r_ontract term. In
effer.t, the term provision provides for a continuous contract
subject to the right of the City to discontinue the r..ontract's
continuity by what. amounts to two years notifacatipr~.
Tn the context of City contracting, this term provision
is hl.ghly unusual.. Most. of the option clauses that exist. in
City contracts provide for an affirmative exercise by the City
pf an option on or before a date c,iose to the contract
termination date. This gives the City Council adeauate tame
to review tha desi.reabilit.y of extending a contract. if the
Ci.t..y Council; for anj number of reasons, desires not to extend
the contract., it need not exercise the option.
The proposed contract, however, provides that the
contrar.T. is automatically renewed absent affirmat.i.ve City
action tp the contrary. Moreover, the time period of making
this determination i.s not toward the end of the contract term
but toward the beginning. Thus, should the City at any point
in time be dissatisfied with the contractor or believe that
r..hanges in approach are required; it. must affirmatively act to
avoid automatic contrar..t extension. Bi.aT when the City makes
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this determination, there will sti:i.l be two years remaining in
the contract period and City concerns that motivated the
non-renewal of the cont,rart r.annot he promptly addressed.
REC'Od4MF.NDATTON
In order to ensure consistency with standard City
cont.ract.ing procedures; it i.s recommended that the Gity
Council consider either a fixed term contract or a contract
providing for the affirmative exerr.ise of an option by the
City near t_he end of the contra r, t. term.
PREPARED BY: Robert M. Myers, City Attorney
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