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HomeMy WebLinkAbout9/18/2002 - STAFF REPORTS (4) DATE: September 18, 2002 TO: City Council FROM: Assistant City Manager- Administration SUBJECT: Approve Second Amendment to Agreement for Operations of the Palm Springs International Film Festival. RECOMMENDATION: It is recommended that the City Council approve an amendment to the agreement with Palm Springs International Film Festival extending the City's financial support for an additional one (1) year. SUMMARY: On April 1, 1992, the City entered into an agreement with the Palm Springs International Film Festival for the organization, management and production of an annual film festival. The original term of the Agreement was for five (5) years expiring on June 30, 1997. The City Council extended the term of this agreement for an additional five (5) years on February 17, 1997. Although the current agreement expired on June 30, 2002, the City Council, at its sole discretion, can extend the term of the agreement for an additional period of time. BACKGROUND: The Palm Springs International Film Festival is one of the largest film festivals in the country, screening over 180 films from more than 55 countries. The Festival screens a majority of the official international submissions to the Academy of Motion Picture Arts and Sciences for Best Foreign Language Film. Last year's festival included more than 150 films from approximately 40 countries. It is estimated that over 70,000 people attended the 2002 festival. The Palm Springs International Festival also holds the largest short film showcase in North America. The 2002 Festival, which was held August 6-12, featured over 290 films, selected from more than 1,400 worldwide entries. According to information obtained from the Film Festival, total attendance was up by 23% over last year. In addition, a total of 49 different countries were represented at this year's festival. The City has provided financial support to the film festival since 1992. Although the Film Festival would like the City to renew its financial support for an additional five (5) years, staff recommends that the agreement only be extended for one (1) year. Staff is concerned that the existing agreement, which is slightly over ten years old, needs to reviewed and updated. It is suggested that staff use this one (1) year extension to work with the event organizer in drafting a new agreement for City Council consideration at the end of the term. Another reason staff is recommending that the City Council approve a shorter term has to do with the uncertainty involving the November general election. As you know, a citizen's group has qualified four ballot initiatives for the November 2002 general election. One of these 1 /19 initiatives, Measure "U", seeks to repeal the City's five percent (5%) utility users tax imposed on telephone, electricity and gas services. If passed, the City is anticipated to lose approximately $5.8 million, or 12% of all funding for public services. Without this revenue the City will have to reduce public services and cut financial support for major annual events like the Film Festival. Because the outcome of the election will not be known for several months, staff believes that it would be imprudent for the City to enter into a long-term financial commitment that may have to be terminated if funding is not available. In addition to the shorter term, staff is suggesting an "escape clause" be incorporated into the amendment. This particular clause will enable the City Council to terminate the agreement, without incurring further financial liability, should Measure "U" pass. Staff has discussed this provision with representatives from the Film Festival. Although they are justifiably concerned about the potential loss in sponsorship funds, they understand the reason for this provision and are in full agreement of including this language in the amendment. The current agreement provides for a total payment of $150,000 per year payable in three installments of $50,000. This is a budgeted expense. Funding is available in the Community Promotions Fund (Account 112-2018-45640). Troy C tzlaff, ssis nt City Manager- Administration APPROVED City Manager % Attachments: 1. Minute Order 2. Second Amendment 1 2 SECOND AMENDMENT TO AGREEMENT FOR OPERATION OF PALM SPRINGS INTERNATIONAL FILM FESTIVAL This Second Amendment to Agreement for Operation of Palm Springs International Film Festival ("Second Amendment" or "Amended Agreement") is made and entered into this day of 12002, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and the PALM SPRINGS INTERNATIONAL FILM FESTIVAL ("Festival") and amends that certain "Agreement for the Operation of the Palm Springs' International Film Festival' (the "Agreement") dated April 1, 1992 between the same parties. RECITALS A. On or about April 1, 1992, City and Festival entered into an Agreement for Operation of the Palm Springs International Film Festival pursuant to which Festival agrees to organize, manage and produce an amnial Palm Springs International Film Festival in January of each year during the term of said agreement and the City agreed to compensate Festival for such services. B. The original term of the Agreement was five (5) years expiring on June 30, 1997. C. The Agreement was amended on February 19, 1997 extending the term for an additional five (5) years. D. The current Agreement expired on June 30, 2002. E. City and Festival desire to amend the Agreement to extend the City's financial support for one (1) year as set forth in this Second Arnendrnent. //93 AGREEMENT The Agreement is hereby amended as follows: 1. Section 3.2 "Terns" is amended to read as follows: "3.2 Term. The term of this Agreement shall is hereby extended to June 30, 2003, provided that this Agreement shall terminate on the occurrence of the event of termination specified in Section 3.3 below." 2. Section 3.3 is hereby added to read: "3.3 Event of Termination. A ballot measure to repeal the City's Utility User Tax has qualified and will be submitted to a vote of the people at an election in November of 2002. As the utility users tax is a major revenue source constituting some twelve (12%)percent of the City's budget, if such tax is repealed, the City will need to withdraw from a number of its contractual obligations in order to reduce expenses to match its reduced revenue. Accordingly, this Agreement is subject to termination and City shall have no obligation to make further payments hereunder. 3. Except as expressly provided herein, all other terms and conditions of the Agreement shall remain in fill force and effect. IN WITNESS WHEREOF, the parties hereto executed this Second Amendment to be effective as of the Date first written above. 1)9q MINUTE ORDER NO. APPROVING THE SECOND AMENDMENT TO THE AGREEMENT FOR OPERATIONS OF THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL FOR THE PURPOSE OF EXTENDING THE TERM OF THAT AGREEMENT FOR ONE (1) YEAR. f --------------- I HEREBY CERTIFY that this Minute Order, approving the Second Amendment to the Agreement for operations of the Palm Springs International Film Festival for the purpose of extending the term of that agreement for one (1) year was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 18th day of September, 2002. PATRICIA A. SANDERS City Clerk 1 3