CITY OF CARMEL-BY-THE-SEA

AGENDA BILL

AB 1048
November 2, 2015
Orders

TO:

Honorable Mayor and Members of the City Council

FROM:

Douglas J. Schmitz, City Administrator and Christine Sandin, Executive Director, Sunset
Cultural Center

SUBJECT:

Receive community input on a new agreement between the City of Carmel-by-the Sea
and the Sunset Cultural Center

AMOUNT OF EXPENDITURE

$0

AMOUNT BUDGETED

$0

APPROPRIATION REQUIRED

$0

RECOMMENDATION
Receive public input on matters to consider for inclusion as negotiations commence between the City
and the Sunset Cultural Center for a new agreement.
SUMMARY
The City and Sunset Cultural Center entered into a three year agreement in 2013. That agreement
terminates on 30 June 2016. The parties wish to commence discussions leading to a new agreement.
The November City Council meeting provides an opportunity for the public to give the Council input on
matters that should be considered for inclusion in a new agreement.
PRIOR CITY COUNCIL ACTION
N/A
ATTACHMENTS
1. Sunset Center Operating Renewal Agreement

APPROVED:
Date:

_:2,

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Page 1

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ATTACHMENT- 1

SUNSET CENTER OPERATING AGREEMENT RENEWAL

OUTLINE OF DISCUSSION ITEMS RE: RENEWAL TERMS

Background:
Sunset Cultural Center, Inc. ("SCC") has operated the Sunset Community & Cultural Center ("the
Sunset Center") under a written contract with the City of Carmel by the Sea ("the City'') since 2003
when the facility's management was transferred from the City to sec, an independent 501(c)(3)
organization . The first contract carried a 10-year term and was renegotiated in 2013 for a 3-year term .
In anticipation of renewing the operating agreement prior to the current contract expiration in June
2016, representatives from both the City Council and Staff, and sec Trustees and Staff, have re cently
entered into discussions to develop a revised agreement that reflects the current and evolving needs
of both parties, for the ultimate benefit of the community and users of the Sunset Center.
Outline of Proposed Contract Terms:
WHEREAS, the City is the owner of the Sunset Community & Cultural Center; and
WHEREAS, sec has been organized as a California nonprofit corporation for the express purpose of
managing and operating Sunset Center; and
WHEREAS, both parties desire that the Center be managed and operated as a place for pubic
entertainment, meetings and cultural events in accordance with the provisions of an Agreement; so
that the City will be relieved of the responsibility of operating the Center; and
WHEREAS, the City and sec agree that the sustaina bility and success of the Sunset Center is dependent
upon the long-term stability of the organization, including consistent leadership and annual City
funding consistent with current levels of support; and
WHEREAS, it is the intent of both parties to achieve these mutual goa ls through a long-term
partnership;
NOW, THEREFORE, the parties are discussing the following:
Proposed Terms:
1. The parties to the Ag reement would be SCC and the City. SCC operates with a 13-member Board of
Trustees. SCC operates the Sunset Center with a $3 million annual budget and a staff of fifteen (15)
full-time employees, seven (7) part-time employees and contracted skilled labor for stage
operations.
2. The anticipated effective date of the Agreement will be selected upon the conclusion of
negotiations.
3. SCC would continue to manage all operations of the Sunset Center with the following goals:
a. Ensure proper leadership and staffing levels.
b. Deliver diverse arts programming of the highest quality, including collaboration with the
Center's current resident companies.

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c. Be a vibrant community center serving the needs of Carmel residents and community
organizations.
d. Grow arts engagement and education programs for all ages.
e. Operate, maintain and, as appropriate, ensure that the Sunset Center is a state-of-the-art
facility that is responsive to the needs of audiences and performers.
f. Ensure the long-term financial viability and stability of sec.
g. Operate in a fiscally responsible manner.
h. Establish an endowment fund and pursue a diversity of revenue support.
4. The proposed term of the Agreement is thirty (30) years, in five (5) year increments, to allow for
the long-term stability and sustainability of the Sunset Center with consistent, professional
management that will instill confidence in supporters and patrons, and enabling sec to establish a
long-term fundraising plan .
a. Understanding the need for regular assessment of SCC's operation of the Sunset Center, the
Agreement would provide for a review and renewal process every five (5) years.
b. For unanticipated circumstances that may arise but are currently difficult to predict, either
party may decide to withdraw from the Agreement with a 2-year notice to terminate, which
provides an appropriate period of time for sec to wind down and transfer its operations to
the City or to a successor to SCC. This 2-year period would also be used to make every effort
to cure the pertinent issues and to avoid complete termination of the Agreement.
c. Default notices may be issued by either party (for cause to be defined in the Agreement)
with a reasonable time and opportunity provided to cure any default.
5.

sec will advise and collaborate with the City on planning for capital improvements to the Sunset
Center. The City will maintain the facilities in a first-class condition. Responsibility for the cost and
execution of capital improvements and maintenance will be clearly defined in the Agreement.

6.

sec will partner with the City in long-term campus and facility planning. The City shall

retain the

right to approve all aspects of a plan and its implementation.

7. The City Council acknowledges that due to SCC's current subsidy of ongoing historic programs,
inflationary increases over the t erm of the contract, additional services that may be needed, or other
unforeseen needs, Sunset Center will require continuing annual financial support from the City;
however, the Council cannot commit or bind future council's to a specific level of financial support.
8. The City will ensure sufficient parking in the North Parking Lot for patrons of the Sunset Center
events in a manner that also accommodates employee parking for downtown businesses.
9. All revenue generated from fundraising, rental or performance fees, concessions, etc. from the
Sunset Center shall be used by SCC for the operation and management of the Center and for
ongoing program development and promotion of the Center.
10. Upon termination of the Agreement, endowment funds raised by SCC shall be transferred to and
maintained by a qualified nonprofit organization which would use the endowment to assure the
intent of donors is honored. Monies not specifically assigned by donors to SCC's endowment
would be used as received to pay for the operations and upkeep, maintenance and preservation
of the Sunset Center.

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11. SCC will employ and contract all qualified labor required for the operation. SCC's employees,
agents and independent contractors shall not be City employees.
12. Both parties shall carry insurance in amounts to be agreed upon and shall name each other as
additional insureds.
13. The sec Board and City Council will meet as appropriate, but not less than annually to ensure
adequate and clear communication and coordination of goals and objectives .
14. There shall be regular and consistent communication between the City Administrator and the
Executive Director, including meetings to be scheduled quarterly.

sec

15. Disputes will be resolved by alternate dispute resolution process including:

a. Informal meet and confer
b. Formal mediation
c. Binding arbitration
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