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02-225f Resolution No. 02-225 RESOLUTION AUTHORIZING EXECUTION OF A PURCHASE OF SERVICE AGREEMENT WITH THE ELGIN SYMPHONY ORCHESTRA ASSOCIATION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Ed Schock, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Purchase of Service Agreement on behalf of the City of Elgin with the Elgin Symphony Orchestra Association for support of its Friday Classic Series, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: June 26, 2002 Adopted: June 26, 2002 Vote : Yeas : 5 Nays : 2 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk PURCHASE OF SERVICE AGREEMENT BETWEEN THE CITY OF ELGIN AND THE ELGIN SYMPHONY ORCHESTRA This agreement is made and entered into this Z 3 day of _2ii, 1!✓' , 2002, by and between the ELGIN SYMPHONY ORCHESTRA ASSOCIATION, not-for-profit organization,(hereinafter referred to as the"ESO")and the CITY OF ELGIN. Illinois,a municipal corporation, (hereinafter referred to as the"CITY"); and WHEREAS,the City of Elgin,Illinois has determined it to serve a beneficial public purpose to maintain the Elgin Symphony Orchestra as the largest cultural organization in the Fox Valley,the second largest symphony orchestra in the state and one of the fastest growing orchestras in the country; and `IT WHEREAS,the City of Elgin,Illinois has determined it to serve a beneficial public purpose to encourage a wide range of symphonic programming. NOW, THEREFORE, in consideration of the mutual premises and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The City shall pay to the ESO the sum of$ 30,000 before June 30, 2002. It is understood and agreed that said $ 30,000 payment from the City to ESO is intended as a one-time payment by the City to ESO to assist the ESO with funding for shortfalls for the 2001 performance season Friday Classic Series and is not intended nor shall be construed as establishing a precedent for any future funding by the City to ESO for the Friday Classic Series. 2. The ESO shall apply the full amount of the aforementioned $ 30,000 to compensate for funding shortfalls from the 2001 performance season Friday Classic Series Performance. 3. The City shall have the right to review all accounting records related to the use of the $ 30,000, given 72 hours notice, and at a time agreed upon by both parties. 4. To the fullest extent permitted by law,ESO agrees to and shall indemnify,defend and hold harmless the City, its officers, employees, boards and commissions from and against all claims, suits,judgements, costs, attorney's fees, damages or other relief arising out of any negligence,acts or omissions of the ESO or its officers, employees or agents in the performance of this agreement or operations funded pursuant to this agreement. Nothing herein affects the ESO's duty to defend the City. In the event of any action against the City, its officers, employees, agents, boards or commissions covered by the foregoing duty to indemnify,defend and hold hannless, such action shall be defended by legal counsel of the City's choosing. 5. This agreement shall be in full force and effect from the date of its execution through December 31, 2002. 6. The terms of this agreement shall be severable. In the event any of the terms or provisions of this agreement are deemed to be void or otherwise unenforceable for any reason, the remainder of the agreement shall remain in full force and effect. 7. This agreement shall not be construed so as to create a joint venture, partnership, employment or other agency relationship the parties hereto. 8. This agreement shall be subject to and governed by the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights arising out or in connection with this agreement or its performance shall be in the Circuit Court of Kane County, Illinois. CITY OF ELGIN ELGIN SYMPHONY ORCHESTRA ASSOCIATION By By Ed Schock Michael Pastreich Mayor Executive Director Attest: Dolonna Mecum City Clerk KCity of Elgin Agenda Item No. - -- 11 C�� r►ru` - R 1 th '00i .c 'f May 3, 2002 prii; �R�f i tt[!t 'ti fr t ot '!{ FINANCIALLY STABLE CITY GOVERNMENT TO: Mayor and Members of the City Council IVALIT INFRASTRU ANO QUALIT Y INFRA STRUCTURE FROM: Olufemi Folarin, Interim City Manager SUBJECT: Consideration of Additional Funding for the Elgin Symphony Orchestra PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to consider providing the Elgin Symphony Orchestra (ESO) with an additional one-time allocation of $30, 000 in order to offset the operating shortfall from their Friday Classic Series Performances . • BACKGROUND During the 2001 performance season, the ESO added a Friday Night Classic Series in order to enable more patrons to attend ESO concerts . Although, it was felt there was a community need to add the additional performances, the ESO has met significant financial challenges in doing such a program. According to the .ESO, the gap between income and expenses for the Classic Series has increased by $115, 000, from $25, 000 to $140, 000 . It has been requested that the City fund $30, 000 of the $115, 000 operating loss . The remaining $85, 000 will come from the community through corporate sponsorships . The previously approved Purchase of Service Agreement with ESO provides for $193 , 000 of funding. A total of 155, 000 is funded from the Riverboat Fund and designated for ESO support and youth initiatives . Another $38, 000 comes from the General Fund-Cultural Arts Commission budget . In order to fund the additional request it is suggested that the Regional Parks Development program be reduced from $1, 090 , 201 to $1, 060, 201 . It is anticipated that the full amount for Parks acquisition will not be spent in 2002 . • • Consideration of additional funding for ESO May 3 , 2002 Page 2 There are several concerns related to the additional funding that must be noted. First of all , by providing the additional funding, we are moving from the previously stated position of not increasing funding to not-for-profit agencies in 2002 . Secondly, there is concern that the City is placing itself in the position that this additional funding will be carried forward into future years . The City might need to ask the ESO to perform a cost benefit analysis of the Friday Night Classic Series to determine whether it should be continued due to its less than stellar financials . It is also urged that the City Council make it clear that this additional funding is for 2002 only, regardless of the financial position of the Friday Night Classic Series in future years . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED This matter has been discussed with the Elgin Symphony Orchestra. f FINANCIAL IMPACT I In the 2002 Budget, there is $155, 000 budgeted in the Riverboat Fund account number 275-0000-791 . 80-11 (Elgin Symphony Orchestra) . This account would be increased by $30, 000 by reducing, in a similar amount, the Riverboat Lease Fund account number 276-0000- 791 . 92-31 (Regional Parks Acquisition). . After considering the funding from the Cultural Arts Commission, ESO support for 2002 will total $223 , 000 . ,,,,�'EGL A IMPACT An agreement providing the funding will have to be executed. ALTERNATIVES 1 . The City Council could approve the additional funding of $30, 000 . 2 . The City Council could reduce or increase the funding amount . 3 . The City Council could decline to provide the funding. • • Consideration of additional funding for ESO May 8 , 2002 Page 3 RECOMMENDATION It is recommended that the City Council approve the additional funding, reflecting an additional one-time City contribution of $30, 000, with the Elgin Symphony Orchestra as presented. Respectfully submitted, Olufemi ' lari Interim t nager SRS/srs Attachment • • • September 30, 2001 Mrs. Joyce Parker City Manager City of Elgin 150 Dexter Court Elgin, IL 60120 Dear Joyce, The Elgin Symphony Orchestra is extremely grateful for the City of Elgin's continuing support over the past decade. The City of Elgin is clearly dedicated to establishing itself as the region's cultural center, and the ESO has worked hard to support this goal. During 2001, the City's support of$193,000 funded, in part, the following ESO activities: $75,000 Youth initiatives. $30,000 Box office salaries to offset the expenses associated with • maintaining a year-round box office in the center city area. $63,000 General operational expenses. $25,000 SCORE! (Students Creating Opera to Reinforce Education) program, a collaboration with Hamilton Wings. As the City develops its budget for fiscal year 2002, the ESO requests that continued funding in the amount of$223,000 be considered. This request represents an increase of$30,000 to maintain our newly introduced Friday Night Classic Series. Over the five-year period from the 1996-1997 season to the 2001-2002 concert season, the Elgin Symphony Orchestra has needed to increase programming to accommodate community demand, making us the Nation's fastest growing orchestra. During this period, the number of patrons served annually has increased from 30,000 to 45,000 and the number of Classic and Pops season subscribers has increased by over 95%. As sold out houses have required the ESO to turn away patrons wishing to attend our Classic Series performances, the ESO's Board of Directors has approved the introduction of a Friday Night Classic Series. The new night of performances will enable more patrons to attend ESO concerts. Early signs indicate that the new series is well received by the public. We have already sold a third of the hall on subscriptions, before single tickets were placed on sale. • As an organization whose mission is to serve the needs of the community, the ESO felt it our responsibility to add performances to meet growing community demand. However, the challenge in doing so is significant. With the introduction of the Friday night to our existing Saturday and Sunday Classic Series weekend, the gap between income and expenses for our Classic Series has increased by $115,000, from $25,000 to $140,000. We are asking the City of Elgin to fund $30,000 of the $115,000 increased gap. The remaining $85,000 will come from the community through corporate sponsorships and individual contributions. During the five-year period mentioned above the ESO's total budget has increased by 110%. At the start of this five-year period, the City of Elgin's funding to the ESO was a generous $150,000, or 14% of our budget. As both our budget and the City's funding have increased, City funding was at 10% of our budget last season. The increase for which.we are asking will maintain the City's funding at 10% of our budget. The ESO understands that the City of Elgin has a responsibility to its community to assure that funds are supplied to services for which the community has a demonstrated need. During the same five-year period discussed throughout this letter, ticket sales have increased from 30% of our budget to 42% ($318,000 to $900,700). The Elgin Symphony Orchestra is tremendously grateful to the City of Elgin for the support you have allotted for over a decade, and we assure you that we will continue to earn your support in every way possible. • Thank you for your consideration. Sincerely, Michael Pastreich Executive Director •