REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Finding that the NOVAworks Foundation Supports a Public Purpose and Authorizing the City Manager to Execute a Cooperation and Administration Agreement for NOVAworks Foundation to be a City-Supporting Organization
Report
BACKGROUND
The NOVAworks Foundation (“Foundation”) is a non-profit, public benefit corporation. It has been granted 501(c)(3) tax-exempt status by the Internal Revenue Service. The Foundation was created in 1989 to enhance workforce development services provided by the City’s NOVA Workforce Services Department (NOVA) for the residents and businesses of seven Santa Clara County cities (Cupertino, Los Altos, Milpitas, Mountain View, Palo Alto, Santa Clara and Sunnyvale) and San Mateo County. The regional area served by NOVA is a local workforce development area under the Workforce Innovation and Opportunity Act (WIOA). Most of NOVA’s funding is provided through WIOA and may be used only for specific activities defined under WIOA and to serve participants eligible under WIOA regulations. The Foundation exists to fill gaps in services that promote economic sustainability as well as to gain a better understanding of the current labor market.
The Foundation currently has a five member board of directors appointed by the board at its annual meeting. Two of the Foundation’s directors also serve on the NOVA Workforce Board to ensure that the Foundation’s activities are in alignment with NOVA’s overall mission. The Foundation is a supporting organization of the City, in accordance with Section 509(a)(3) of the Internal Revenue Code, and the Foundation's charitable purpose furthers the public purposes of the City.
EXISTING POLICY
Council Policy 5.1.1: Socio-Economic - Goals and Policies: Education and Training Goal 5.1F: Provide job training and employment services, within constraints of operative Federal regulations and available Federal funding, to address the locally-determined employment and training needs of economically disadvantaged residents and others with special needs.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental, organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
Since the Foundation’s inception, the City has acted as its fiscal agent. Funds received by the Foundation are deposited, tracked, and reported by the City. The City’s accounting system allows for separation of these funds from the remainder of NOVA or City funds. The Foundation has no staff; however, City staff has provided minimal administrative support. There is currently no legal agreement between the City and the Foundation to formalize the fiscal agent relationship and the rights and responsibilities of both the City and the Foundation.
Until 2017, the NOVAworks Foundation generally received and spent under $50,000 per year. In June of 2017, the Foundation was a recipient of a grant for $250,000 from the Tides Foundation, on behalf of the Google.org Charitable Giving Fund. As is typical of most foundations providing charitable support, the funder could only award the grant to a 501(c)(3) organization; therefore, the NOVAworks Foundation needed to be the grant recipient for this project providing funding to build a hiring pipeline for low-income youth in the Bay Area and the City could not be a direct recipient of the grant funds.
Due to the large dollar amount, this grant required more extensive tracking and reporting. It also triggered a discussion among the Foundation directors as to the future direction of the Foundation, including its intent relative to fundraising. Given the potential for more extensive Foundation revenue and increased fiscal responsibilities, it became apparent that a formal agreement was needed to govern the relationship between the City and the Foundation.
The Foundation desires to enter into an agreement to set forth: (i) the parties' desire to efficiently and effectively cooperate in furtherance of the charitable purposes of the Foundation, and the public purposes of the City, of increasing and improving job training programs and opportunities within the NOVA workforce region; and (ii) the relationship between the parties regarding certain administrative assistance and other services provided by the City to the Foundation. Council is requested to adopt a resolution authorizing the City Manager to sign a Cooperation and Administration Agreement between the City and the Foundation and clarifying that the NOVAworks Foundation is a supporting organization of the City. (See Exhibit A of Attachment 1) The Foundation Bylaws and Articles of Incorporation are amended to ensure alignment with this Agreement. (See Exhibit B and C of Attachment 1)
FISCAL IMPACT
City staff will provide accounting, contracting and financial services to the Foundation. The majority of this activity will be completed by NOVA staff, with support from the Department of Finance. This activity can be absorbed within existing budgeted resources.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Adopt a resolution finding that the NOVAworks Foundation supports a public purpose and authorizing the City Manager to execute a Cooperation and Administration Agreement for NOVAworks Foundation to be a city-supporting organization.
Staff
Prepared by: Jeanette Langdell, Employment Training Manager
Reviewed by: Kris Stadelman, Director, NOVA Workforce Services
Reviewed by: Timothy J. Kirby, Director, Finance
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Resolution