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CITY COUNCIL STAFF REPORT
DATE: February 25, 2021 CONSENT AGENDA
SUBJECT: APPROVAL OF A REVISED AND RESTATED ANIMAL SHELTER
SERVICES AGREEMENT WITH FRIENDS OF THE PALM SPRINGS
ANIMAL SHELTER – UPDATED 2/24/21
FROM: David H. Ready, City Manager
BY: Marcus L. Fuller, Assistant City Manager
SUMMARY:
The City and the Friends of the Palm Springs Animal Shelter (“Friends”) entered into an
agreement in 2012 for the operation of the City’s new Animal Shelter at Mesquite
Avenue and Vella Road. Friends has successfully operated the Animal Shelter since
that time, and Staff recommends the City Council approve a Revised and Restated
Agreement with Friends to continue the City’s long-term partnership with Friends for
operation and management of the City’s Animal Shelter.
RECOMMENDATION:
1. Approve the Revised and Restated Animal Shelter Services Agreement with Friends
of the Palm Springs Animal Shelter, a California non-profit corporation, with an initial
term through June 30, 2026, subject to a five year extension through June 30, 2031;
and
2. Authorize the City Manager to execute all necessary documents.
BACKGROUND:
In 2011 the City completed construction of, and opened for public use, a new state-of-
the-art 20,000 square feet Palm Springs Animal Shelter facility and grounds located at
4575 E. Mesquite Avenue, (the “Shelter”), as generally depicted in Figure 1 on the next
page. Initially the City operated the Shelter with its own staff, but in 2012 the City
evaluated operation of the Shelter by third parties and non-profit organizations.
On October 17, 2012, the City Council approved the privatization of the Shelter
operations and approved an Operating Agreement with Friends. The initial term of the
agreement was through June 30, 2018, with two – three year optional extensions. The
term of the original agreement extends to June 30, 2024 in accordance with the
allowable extensions. A copy of the 2012 staff report is included as Attachment 1.
City Council Staff Report
February 25, 2021 -- Page 2
Revised & Restated Animal Shelter Services Agreement
Figure 1
On November 6, 2013, the City Council approved an amendment to the agreement to
amend certain provisions. A copy of the 2013 staff report is included as Attachment 2.
As part of the City’s budget process for the current 2020/2021 Fiscal Year budget, the
City Council approved a decrease in the annual payment (and eliminated the automatic
annual increase) to Friends for operation of the Shelter, including a requirement for
Friends to assume certain City maintenance obligations. These changes were reflected
in a Side Letter Agreement approved by the parties.
A copy of the amended agreement and Side Letter incorporating the recent changes
implemented in the current FY 2020/2021 budget is included as Attachment 3.
City Council Staff Report
February 25, 2021 -- Page 3
Revised & Restated Animal Shelter Services Agreement
STAFF ANALYSIS
Friends has successfully operated the Shelter since 2012, and the City and Friends
have met periodically over the last 2 years to discuss overall changes to the original
agreement to reflect Friends’ current operations and to extend the term for a longer
period of time. Staff recommends the City Council consider approval of the Revised and
Restated Agreement to provide for a long-term partnership for continued operation and
management of the Shelter by Friends.
The scope of services to be provided by Friends remains the same as in the original
agreement, with minor changes in obligations between Friends and City that were
accommodated in amendments previously approved by the parties.
The following list identifies the changed terms and conditions in the proposed
agreement:
• Section 2(GH) – original agreement did not allow for Friends to expand the capacity
of the Shelter. The proposed agreement allows for Friends to adjust the capacity of
the Shelter upon notice to City, and to allowThis new provision will allow Friends to
accept and care for animals received from outside the City limits provided the cost
therefore is paid from Friends’ own funding sources and that no City funds are used.
• Section 6(D) – the original agreement (Section 6E) required that Friends have 14.2
full-time equivalent positions (FTEs) and specific listing and title. The proposed
agreement reflects that Friends currently has 40 FTEs and requires Friends to notify
City of any decrease to its staffing plan as part of its annual budgeting process.
• Section 7 – this section relating to insurance and indemnification has been
completely revised and restated to incorporate the City’s current standard terms and
conditions.
• Section 9 – this section relating to maintenance of the Shelter has been revised to
reflect the current mutual obligations of each party – particularly with Friends’
obligation to assume responsibility for interior maintenance of the Shelter, and for
onsite landscape maintenance and pest control services.
• Section 10 – this section has been revised to identify the City’s payment of the
Management Fee to Friends for its operation of the Shelter. The Management Fee is
maintained at the current level of funding appropriated in the FY 2020/2021 budget
at $940,402 payable in monthly installments. This section will allow Friends to
request an increase to the Management Fee as part of the City’s annual budget
process, and will be subject to the City Council’s appropriation of funds in the
adopted budget.Friends has requested that the Management Fee increase over the
next two fiscal years to bring the fee up to the amount previously paid in the FY
2019/2020 budget ($1,115,402), and subsequently adjusted annually by the CPI.
This will require an additional budget appropriation of $87,500 in FY 2021/2022 and
FY 2022/2023 budgets.
• Section 11A has been revised to incorporate the City’s responsibilities as the
City Council Staff Report
February 25, 2021 -- Page 4
Revised & Restated Animal Shelter Services Agreement
landlord for major repairs to the Shelter.
• Section 12 – the term is effective upon approval and will extend for 5 years and 4
months through June 30, 2026, with a 5-year extension available through June 30,
2031.
• Section 13 – this section incorporates standard terms and conditions applicable to
city contracts.
A copy of the proposed agreement is included as Attachment 4.
ENVIRONMENTAL ASSESSMENT:
Pursuant to the California Environmental Quality Act (CEQA), this item is categorically
exempt under CEQA, in that it can be seen with certainty that there is no possibility that
this action will have any effect on the environment.
FISCAL IMPACT:
The City agreed to pay Friends an annual amount of $995,000 starting with the
2013/2014 fiscal year (July 1, 2013), subject to an annual increase in accordance with
the Consumer Price Index. Over time, the annual payment increased due to the CPI to
$1,115,402 for the 2019/2020 fiscal year (July 1, 2019).
In April/May 2020 as the City was preparing the revised 2020/2021 fiscal year budget,
Friends agreed to reduce the City’s annual payment to assist in its budget deficit
challenges. The current annual payment for the 2020/2021 fiscal year (starting July 1,
2020) is $940,402 – less than the original amount paid in 2013.
The proposed agreement maintains the City’s payment to Friends of $940,402 as this
amount is what is appropriated in the current fiscal year budget. However, in fairness to
Friends, the proposed agreement allows for Friends to submit its annual operating
budget to the City by March 1 annually for Staff to consider its budget and any proposed
increase to Friends annual payment. The proposed agreement provides flexibility in
considering changes to Friends’ annual payment in the context of their annual operating
budget and will consider outside funding or donations that Friends can secure. Any final
amount to be paid to Friends in each year will be subject to the City Council’s approval
through its appropriation of funding for the Animal Shelter in each fiscal year budget,
similar to how the City Council budgets and appropriates funding for other enterprises
including the Convention Center and Golf Coursefor the remainder of the current fiscal
year. Commencing on July 1, 2021 the payment will increase by $87,500 to $1,027,902
and commencing on July 1, 2022 the payment will increase again by $87,500 to
$1,115,402 increasing the payment to the level paid in the 2019/2020 fiscal year
budget. Commencing on July 1, 2023 the payment will be adjusted by the CPI.
City Council Staff Report
February 25, 2021 -- Page 5
Revised & Restated Animal Shelter Services Agreement
SUBMITTED BY:
Marcus L. Fuller, MPA, P.E., P.L.S. David H. Ready, Esq., Ph.D.
Assistant City Manager City Manager
Attachments:
1. 2012 Staff Report
2. 2013 Staff Report
3. Current Agreement
4. Proposed Agreement