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HomeMy WebLinkAbout101-Options for Facility Rental Policy for Non-Profit Fundraisers.pdf 1 SARATOGA CITY COUNCIL MEETING DATE: January 20, 2010 AGENDA ITEM: DEPARTMENT: Recreation & Facilities CITY MANAGER: Dave Anderson PREPARED BY: Michael Taylor, Recreation & Facilities Director DIRECTOR: Michael Taylor SUBJECT: Options for Facility Rental Policy for Non-Profit Fundraisers RECOMMENDED ACTION: Review report and provide direction for the City’s facility rental policies and rental fees for non-profit group fundraising use. REPORT SUMMARY: In the wake of several requests from non-profit groups for facility rental fee waivers while conducting fundraising activities, this report is designed to outline several options for amending the existing Facility Use Policy and Fee Schedule. This report summarizes current City policy on this subject and provides Council with alternatives to the current policy. DISCUSSION: The Facility Use Policy that governs the use of all City owned buildings was last revised in July 2007. Non-profit organizations are awarded a 50% discount on rental fees provided they meet the following criteria: · They must provide evidence of their non-profit status. A copy of their letter from the California Secretary of State’s office with their non-profit ID number indicated is required. · Their membership must be at least 51% Saratoga residents OR at least 51% of the persons in attendance at their event must be Saratoga residents. · The event must be open to the public, advertised as such and is for the public benefit · Non-profit groups requesting the use of City facilities for the purpose of fundraising or when an admission fee is charged will pay the regular rental fee. It is the last point that has prompted several non-profit groups to request fee waivers to allow them to receive the non-profit discount for their fund-raising activities. Understandably, the City Council would like the process to be simplified so that these groups would not be required to come before Council for a fee waiver each time they desired to host a fund-raising activity for their cause. While facility rental rates charged by the City of Saratoga are comparable to fees charged by other area agencies, staff has identified several options to incorporate into the existing use PDF created with pdfFactory Pro trial version www.pdffactory.com 2 policy that would allow for a reasonable accommodation of the non-profit groups’ needs as well as the City’s need to generate sufficient revenue to cover at least 65% of the costs to provide the rental facilities. These options include different rental rates for peak versus off- peak use days/hours; a new fee for non-profit groups wishing to host a fund raising event that is more than the regular discounted rate of 50% but less that the non-discounted rate of 100%; allow each Saratoga-based non-profit a set number of fund-raising dates which could be reserved at the regular non-profit discounted rate. Option 1 - Peak versus Off-Peak This option would define peak use times as Friday night and all day and night on Saturdays and Sundays. All other days and times would be considered off-peak. This strategy is most often used to encourage use of facilities that typically have times of light demand. Most cities that have a differentiation between peak and off-peak rental rates have rates that range 10% to 100% more for peak time rental than off-peak. Should this option be chosen, staff recommends that off peak rental rates be set at 80% of the peak rental rates. This will keep Saratoga’s rental rates in line with the rates charged by other cities. Option 2 – Non-Profit Fundraising Rate This option would add another tier to the fee structure to provide for an intermediate rate between non-profit uses for their regular group activities such as meetings, and the current structure for fundraising events sponsored by non-profits. Currently fundraising events must pay 100% of the hourly rental rate while a meeting held by a non-profit group pays only 50% of the hourly rate. Should this option be chosen, staff recommends that a fundraising structure of 75% of the full hourly rate be established for non-profit groups. It is further recommended that only Saratoga resident groups (defined as having 51% or greater Saratoga residents as members) or groups the City Council grants co-sponsorship status qualify for this rate. Option 3 - Allocation of Fundraising Events This option provides for each qualifying non-profit to hold a certain number of fundraising events at City facilities for the discounted rate of 50% off the normal rate. Should this option be selected, staff recommends that City Council cap the number of events qualifying for this discount at 1 or 2 per year per organization. RECOMMENDATION: Staff recommends strong consideration of either option 2 or 3 or a combination of the two. While Option 1 would encourage rentals during off-peak times, it is those times that are frequently used by the City for meetings and recreation programs. The potential revenue gain is minimal in light of the loss of the use of City facilities for City business. Options 2 and 3 will save groups money without hampering their marketing efforts. A combination of Option 2 and Option 3 will give non-profit groups a discount while also limiting the potential reduction of City revenues. Most non-profit groups conduct 1 or 2 major fundraising events per year. If applied to City facility use applications judiciously, groups can maximize the benefit they will receive from this discount. It is further recommended that the criteria for qualifying for this rate be kept as is: 51% of the group’s membership be Saratoga residents and be a registered non-profit group. Staff recognizes that there may be some de-facto groups that have not gone through the non- profit incorporation process and suggests that a process for granting these groups non-profit status for the purposes of qualifying for the rental rate discount be established. Many cities PDF created with pdfFactory Pro trial version www.pdffactory.com 3 have a system where groups apply for co-sponsorship to the City Council through an annual process. Once granted, their status is renewed pending no significant changes to their mission and membership. A sample of such a process is included as an exhibit to this report. FISCAL IMPACTS: The City currently receives approximately $20,000 per year from rentals involving fundraising activities. Adopting a combination of Options 2 and 3 would result in approximately $5,000 per year less income than currently realized (equivalent to a 25% reduction in fees). This may be mitigated somewhat by revenue generated as a result of the availability of the Saratoga Prospect Center’s Friendship Hall that has recently become available for rental. ALTERNATIVE ACTIONS: · Alternate A: The City Council could leave the policy as it is and establish a grant fund from the Council Contingency to pay a portion of the rental fees to assist non- profit groups in their fundraising efforts. An annual process is recommended for this purpose. · Alternate B: Ease the requirements for non-profit group usage and reduce the % cost recovery for the Recreation & Facilities Department commensurately. FOLLOW UP ACTION: Give direction to staff for policy and fee changes. Publish any changes to the policy and fees on the City website and make it available to the public. ADVERTISING, NOTICING AND PUBLIC CONTACT: City Council meeting noticed on January 13, 2010. ATTACHMENTS: Attachment A - Existing Council Policy for Use of City Facilities Attachment B - Survey of Neighboring Cities Facility Use Fees re: Non-Profit Use Attachment C - Annual Co-Sponsorship Process Outline PDF created with pdfFactory Pro trial version www.pdffactory.com