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Res 21-027RESOLUTION NO. 21-027 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ACCEPTING THE MCCARTHY FAMILY FOUNDATION GRANT TO SUPPORT A NEW POWAY CENTER FOR THE PERFORMING ARTS ENDOWMENT WHEREAS, the Poway Center for the Performing Arts (PCPA) was built by the City of Poway more than 30 years ago; WHEREAS, the PCPA is a community asset for residents of Poway and the San Diego region, as well as Poway Unified School District students and families, performing arts organizations, and Poway OnStage patrons to enjoy and celebrate the arts; WHEREAS, the City of Poway General Fund has significantly subsidized PCPA operations for many years however due to current and projected General Fund revenues and expenditures, the City can no longer provide the same level of support to the PCPA and new strategies need to be implemented to transition the PCPA to a more financially sustainable operating model; WHEREAS, on April 6, 2021, the City Council held a workshop in which it provided direction to staff on a multi -faceted approach that recognized the value the PCPA brings to the community, while also addressing revenues and expenditures and the current lack of fundraising to offset the City's costs of operating the facility; WHEREAS, prior to engaging in formal fundraising for either a capital campaign and/or the formation of a new endowment, the City Council directed staff to engage the services of a professional fundraiser to conduct a feasibility study; WHEREAS, the McCarthy Family Foundation has supported the PCPA since it was first constructed and is now graciously offering a $1 million grant to the City of Poway to fund the feasibility study to explore the formation of a new endowment to support the PCPA, as well as provide the seed money for the establishment of a new endowment to support the PCPA in accordance with the terms outlined in the attached letter as "Exhibit A"; WHEREAS, per California Government Code section 37354, the City Council must take action to formally receive these grant funds; and WHEREAS, the Poway City Council wishes to thank the McCarthy Family Foundation for their generous support of the arts and the PCPA. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: SECTION 1: In accordance with California Government Code section 37354, the City Council formally accepts the McCarthy Family Foundation's generous grant of $1 million to support the formation of a new PCPA endowment. The City understands this is a two-part conditional grant which components subject to review and approval by the McCarthy Family Foundation as outlined in the attached letter included as "Exhibit A" to this resolution. Resolution No. 21-027 Page 2 SECTION 2: The City Council authorizes the City Manager, or his designee, to work with the McCarthy Family Foundation to execute an agreement clarifying the terms of acceptance and use of the McCarthy Family Foundation grant. SECTION 3: The City Council authorizes the City Manager, or his designee, to execute all documents related to the McCarthy Family Foundation grant, and appropriate the grant funds as necessary to fund the feasibility study, as well as the establishment of the endowment. PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California on the 18th day of May, 2021 by the following vote, to wit: AYES: MULLIN, FRANK, GROSCH, LEONARD, VAUS NOES: NONE ABSENT: NONE DISQUALIFIED: NONE ATTEST: Vai City Clerk C__ Steve Vaus, Mayor Resolution No. 21-027 Exhibit A Page 3 McCARTHY FAMILY FOUNDATION Mayor Steve Vaus City of Poway 13325 Civic Center Drive Poway, CA 92064 Dear Mayor Vaus: April 19, 2021 I am pleased to inform you that the McCarthy Family Foundation has approved a grant of $1,000,000 to support a new Poway Center for the Performing Arts endowment. This grant is being made in response to the Board's decision to sunset the Foundation. These terms shall apply to your use of the foundation's grant: 1. The grant is a two-part conditional grant. The first part is a $30,000 outright grant for a feasibility study to ensure that the endowment and related fundraising is realistic and that there is sufficient commitment from all stakeholders. The second part is a $970,000 grant to establish the endowment. 2. The payment of the $30,000 grant will be made after receipt by the secretary of the foundation, not later than May 3, 2021, of a countersigned copy of this letter by an authorized officer of your organization. Payment of the $970,000 second part of the grant will be made upon: 1) approval of the feasibility study by the Board of Directors of the McCarthy Family Foundation, and 2) the establishment of the endowment as an Internal Revenue Code Section 501 (c) (3) and California Revenue and Taxation Code Section 23701(d) entity. 3. To facilitate your receipt of the electronic $30,000 grant payment, please also provide the relevant banking information with this signed letter (i. e. wire transfer or ACH deposit). 4. Under United States law, the McCarthy Family Foundation grant funds may be expended only for charitable, scientific, literary or educational purposes. This grant is made only for the purposes stated in this letter and it is understood that these grant funds will be used only for the purposes of supporting your organization's charitable activities. It is further understood that this grant will only be continued while your organization continues to operate as a qualified public charity as defined by Section 501 (c) (3) of the Internal Revenue Code and Section 23701(d) of the California Revenue and Taxation Code. 5. Any grant funds not expended or committed for the purposes of the grant will be returned to the foundation. P.O. Box 27389 • San Diego, CA 92198-1389 Resolution No. 21-027 Page 4 6. In the application of its resources to serve the public interest, the foundation gives high priority to the realization of equality of opportunity for all members of society. Accordingly, it is the foundation's expectation that in carrying out this grant, your organization will take appropriate affirmative steps with respect to women and disadvantaged minorities. 7. The foundation may monitor and conduct a review of operations under this grant, which may include a visit from foundation personnel to observe your organization and its activity, discuss the grant and finances with your personnel, and review financial and other records and materials connected with the activities financed by the grant. 8. The foundation will include information on this grant in its periodic reports. If this letter correctly sets forth your understanding of the terms of this grant, will you please indicate your organization's agreement to such terms by having this letter signed by an appropriate officer of your organization, and returned to the secretary of the foundation. It is also understood that by signing this letter, your organization confirms that there has been no change in its qualification as an organization exempt from income taxation pursuant to Section 501 (c) (3) of the Internal Revenue Code and Section 23701(d) of the California Revenue and Taxation Code or its classification as not a private foundation. If any change occurs, please notify the foundation. On behalf of the foundation, may I extend every good wish for the success your organization and its programs. Sincerely, Rachel M. Henneforth President Enclosure RMH/rcp Agreed to by: Title: