REPORT TO COUNCIL
SUBJECT
Title
Action on Recommendations from the Governance and Ethics Committee to Amend Council Policy 049 ("Community Grant Policy")
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
Council Policy 049 Community Grant Policy (“Community Grant Policy”) was approved by the City Council through the adoption of Resolution No. 18-1606 on September 18, 2018. The Community Grant Policy creates a standardized process for the City’s Community Grant Program, which awards grants to qualifying applicants up to $10,000 per applicant, per fiscal year for eligible community events, activities, and Santa Clara youth group participation upon advancement into state, national, or international championship games, competitions, or performances. The City previously provided grants to Santa Clara youth groups/students to support their participation at state, national and international championships, competitions and performances through Policy and Procedure 014 (“Funding Requests - Championship Teams/Individuals”). Policy and Procedure 014 was rescinded when City Council adopted the Community Grant Policy, which merged Policy and Procedure 014 and a draft Sponsorship Policy together into a single policy for grant requests.
Since the Community Grant Program launched on October 1, 2018, the City of Santa Clara has awarded community grants for various community events such as fun runs, social impact summits, car shows, cultural events, pageants, youth events, fundraisers, and community discussions (“Community Event/Activities”). In addition to community events and activities, the City has also awarded grants through the program to Santa Clara youth groups to travel and compete in championship games and performances for football, baseball, softball, robotics, symphonic band, jazz band, and marching band (“Youth Competitions/Performances”). The grants provide organizations and individuals with financial assistance to put on or participate in events, activities, and competitions that provide a benefit to the Santa Clara community.
On May 24, 2022, the City Council approved modifications to the Community Grant Policy that provided additional guidance and requirements on grant eligibility, allowable expenses, and post-event review. Specifically, these updates defined allowable expenses, limited the amount of grant funds for food and beverage, required applicants that received grant funding (grant recipients) to refund any unspent grant funds, provided the City the ability to audit, and restricted the location of general events/activities to Santa Clara, limited advance application submittal to six months prior to events, limited eligibility to competitive grant recipients, and provided the City the ability to evaluate prior events/activities’ success and ability to meet requirements for reoccurring applicants. The current Community Grant Policy (“current Policy”) is included in this report as Attachment 1.
Approximately a year after the Council’s May 24, 2022 approval of the current Policy, staff began the process of proposing additional amendments to the Community Grant Policy that aim to further streamline the grant process for applicants and grant recipients. These proposed amendments include additional requirements for applicants to demonstrate a financial need for grant funding, expanding the types of eligible events/activities to include programs and projects, expanding the eligibles expenses grant funds can be spent towards, defining ineligible expenses, additional language aimed to promote accountability and increase protections for the City, updated eligibility requirements that focus on the efforts and goals of the Community Grant Program, and additional requirements for grant recipients in the post event process.
On July 2, 2024, staff presented the proposed amendments to the Community Grant Policy at the Governance and Ethics Committee meeting (Attachment 2). The Governance and Ethics Committee approved staff’s recommendations to update the Community Grant Policy and provided staff with additional considerations to evaluate. The Governance and Ethics Committee’s feedback is discussed in more detail under the Discussion section.
Staff reviewed the additional considerations proposed by the Governance and Ethics Committee and is requesting the City Council to adopt a resolution that approves an amended Community Grant Policy (“amended Policy”) that incorporates much of the Governance and Ethics Committee’s feedback and additional edits proposed by staff.
The proposed amendments include a restructuring of the Policy to clarify the separate eligibility criteria and procedures for the two categories of grants funded by the Community Grant Program (Community Events/Activities and Youth Competitions/Performances). As a result of restructuring the Policy, the proposed amendments to the current Policy presented to the Governance and Ethics Committee were highlighted in yellow for ease of reading and to clearly identify the proposed amendments (Attachment 2). The amended Policy includes amendments that enhance grant eligibility requirements and criteria, promote accountability and increase protections for the City, and clarify post event requirements for grant recipients. The amended Policy is attached to this report as a redline version and a clean copy (Attachments 3 and 4, respectively). A draft Resolution for City Council approval is included as Attachment 5. Staff has also prepared a summary of all the proposed amendments for reference (Attachment 6).
DISCUSSION
This section of the report describes the proposed amendments to the Community Grant Policy and the 49ers Grant Commitment to the City’s Community Grant Program.
Proposed Policy Amendments - Enhanced Eligibility Requirements and Criteria
The following proposed amendments aim to expand grant eligibility criteria and requirements:
1. Assist Applicants That Have Financial Need: In an effort to promote altruism, inclusivity, and effective use of grant funds towards Community Events/Activities that are being hosted by applicants that have a financial need for grant funding, the Governance and Ethics Committee approved staff’s recommendation to include language in the Policy that requires applicants to demonstrate a financial need for grant funding.
If approved, the Community Grant application (Attachment 7) will be updated to include a field for the applicant to explain why the grant is needed and provide supporting documentation as necessary. The application form is currently an attachment to the policy, but it is not a policy document. Rather, the application is a form intended to aid the applicant and the City Manager’s Office in the application process to ensure that staff has sufficient information to evaluate. Therefore, in an effort to streamline the grant process, staff also recommends removing the application as an attachment to the Policy to allow for future administrative updates as necessary. This change was proposed after the Governance and Ethics Committee’s July 2, 2024 review.
2. Expand Eligible Community Events/Activities: The Community Grant Program was originally designed to support one-time events and activities. However, there are opportunities to promote creativity and increase community engagement and direct benefits to Santa Clara residents by also supporting community projects and programs within Santa Clara. As such, the proposed amendments expanded the definition of eligible Community Events/Activities to include programs and community projects that the Community Grant Program may consider to promote increased public benefits to Santa Clara residents, students, and schools. The Governance and Ethics Committee approved this recommendation without amendment.
3. Enhance Eligibility Criteria: The current Policy’s eligibility criteria for Community Events/Activities and Youth Competitions/Performances require applicants to demonstrate how the request for grant funding aligns with City Council Goals. City Council Goals are established as part of the City Council’s Priority Setting process and are intended to set goals and priorities of the City which may not always be directly applicable to the Community Events/Activities and Youth Performances/Competitions being funded by the Community Grant Program. Staff recommended replacing the Council Goals with the grant focus areas (Santa Clara Youth, Community Service, and Santa Clara Identity/Culture/Representation/Equity) to better assist applicants with identifying how the proposed Community Event/Activity or Youth Competition/Performance aligns with priorities central to the Community Grant Program.
The grant focus areas aim to encourage creative, yet focused, ideas for Community Events/Activities with an emphasis on benefitting the City of Santa Clara. This includes, but is not limited to, supporting Community Events/Activities and Youth Competitions/Performances that positively impact Santa Clara youth (Grant Focus Area: Santa Clara Youth), Community Events/Activities that directly improve the quality of life of Santa Clara residents (Grant Focus Area: Community Service), and supporting Community Events/Activities or Youth Competitions/Performances that celebrate and promote Santa Clara arts, history, sports, education, organizations and individuals, and other efforts that make the City of Santa Clara a great place to live, work, and visit (Grant Focus Area: Santa Clara Identity/Culture/Representation/Equity).
Additionally, the current Policy requires that grant funds are not used for religious or political purposes. Staff recommended updating this requirement to include a clearer definition of both categories for consistency with state and federal laws.
The Governance and Ethics Committee approved the proposed amendments for the grant focus areas and religious and political purposes.
It should be noted that the current Policy requires that the Community Event/Activity and Youth Competition/Performance must contribute positively to the recognition and image of the City of Santa Clara. The proposed amendments presented to the Governance and Ethics Committee removed this eligibility requirement for Community Events/Activities in an effort to reduce any potential redundancy in the amended Policy. However, this eligibility requirement remained intact for Youth Competitions/Performances. Provided that the eligibility requirements for the two grant categories have been separated for clarity, staff recommends adding this eligibility requirement back into the proposed Policy amendments under Community Events/Activities for consistency.
4. Expand Eligible Expenses and Define Ineligible Expenses: The current Policy lists a few eligible expenses (e.g., City permits, fees, and services, venue, food and beverage, trash/recycling, and stage/tent rentals) and is silent on ineligible expenses. However, the City Manager’s Office has not historically approved grant funds for give-away items, consultant fees, and other expenses that would otherwise violate the current Policy or any other City policies. Conversely, staff aims to promote successful Community Events/Activities and consider reasonable requests for grant funds towards expenses essential to the success of the event, provided that they do not violate the Policy or any other City policies. As such, staff proposed amendments to expand the eligible expenses in the Policy to include additional event-specific rental expenses, event insurance, event-related supplies for one-time use, marketing costs, and define ineligible expenses to include gifts and give away items such as gift cards and raffle baskets and programmatic expenses such as staff time, overhead costs, consultant services and payment of hired staff. The Governance and Ethics Committee approved staff’s recommendation.
Subsequent to the Governance and Ethics Committee’s approval, staff proposed further amendments to the eligible expenses to include other permits, fees, and services from other public agencies and other “similar” event rentals and further clarify marketing and promotional expenses, consistent with prior City approval of such grant expenses.
Proposed Policy Amendments - Promote Accountability/Increase Protections for the City
The current Policy is silent on prohibited uses of grant funds and does not provide guidance to address policy violations. However, grant requirements are clearly communicated through the approved grant application and corresponding grant approval letter provided to grant recipients under the grant approval process. The proposed amendments include language that aims to promote accountability and increase protections for the City by setting clear instructions on how grant funds can be spent and what needs to be submitted to the City for auditing. Under the proposed amendments, failure to provide the required verification documentation, failure to follow the terms outlined in the Policy and the approved application, and/or material changes to the Community Event/Activity or Youth Competition/Performance without prior City approval may result in the grant recipient returning grant funds in part or in full and impact their future eligibility to apply for the Community Grant Program.
The Governance and Ethics Committee approved staff’s recommendation with an additional request that staff consider term limits for suspension based on the severity of the policy and demonstration of organizational change by which the infraction occurred. Staff evaluated this request and propose a period of one year upon resolution of outstanding issues. A term limit of one year provides a grant recipient sufficient time and opportunity to review the requirements in the Policy in preparation of an application submittal as a recurring applicant, if desired.
Proposed Policy Amendments - Post Event Requirements for Grant Recipients
Within thirty (30) days upon the conclusion of the Community Event/Activity or Youth Competition/Performance, grant recipients must complete a post event process in which receipts and invoices are submitted for verification that grant funds were spent in the manner they were approved. This requirement in the current Policy allows the City Manager’s Office to measure a grant recipient’s past success when weighing whether to approve or deny a future request for grant funding. Staff recommended including language in the Policy requiring grant recipients to submit additional documentation during the post event process to collect information that could be used to measure the success of the event, including attendance numbers, fundraising actuals (if applicable), and community impact.
The Governance and Ethics Committee approved the proposed amendments with an additional request that grant recipients submit a five hundred (500) word description of how the event went to be included on the City’s website. Staff updated the proposed amendments by expanding the community impact requirement that allows the City to post it on the City’s website. Additionally, the proposed amendments included language outlining the grant recipient’s responsibility in the post event process to provide the required documentation in full and on time. This language was also approved by the Governance and Ethics Committee without additional feedback.
It should be noted that Youth Competitions/Performances have a separate set of requirements in the Community Grant Policy. While the post event process for grant recipients is similar to Community Events/Activities, staff also recommends approval of the proposed amendments that modify the same requirements that are applicable to Youth Competitions/Performances, which were not included in the Governance and Ethics Committee’s review.
Proposed Amendments to Policy/Program - Additional Feedback from the Governance and Ethics Committee
In addition to the various amendments described above, the Governance and Ethics Committee also provided the following feedback to the current Policy/Program:
1. Carryover of Leftover Grant Funds: The Governance and Ethics Committee requested an update to the policy to include proposed amendments that would allow the remaining balance of unused grant funds in the Community Grant Program budget to be carried over to the next fiscal year.
Since FY 2021/22, an average of $52,000 has been awarded annually in Community Grants, leaving on average, a remainder of $38,000 in the Community Grant Program budget per fiscal year that is absorbed back in the City’s General Fund. While the Community Grant Program has had remaining balances in past fiscal years, staff is planning to promote and expand the Community Grant Program to encourage more potential applicants to apply which could result in more expended funds. Consistent with City practices, staff recommends bringing forward any potential carryovers of unspent Community Grant Program funds as part of the adopted budget or budgetary year end process for City Council consideration.
2. Increasing the Maximum Grant Amount: The Governance and Ethics Committee requested updated policy language to increase the maximum grant award amount annually to account for inflation.
In the Community Grant application, applicants must specify the amount of grant funds requested. Upon confirming that the requested grant funds will be spent toward eligible expenses, grant amounts have ranged from $900 to the maximum award amount of $10,000 for an average grant amount of $8,715 per approved applicant from FY 2021/22 through FY 2023/24. Staff’s recommendation is to leave the current policy language in its current form and re-visit this provision if necessary to increase the grant amount to account for inflation if the $10,000 maximum award proves to be insufficient over time due to inflation. Additionally, if there is a need for more grant funds, then Council can approve those funds through the budget process or through a budget amendment, consistent with current City practice.
3. Reservation of Funds for Youth Competitions/Performances: The Governance and Ethics Committee requested proposed amendments to allow for a portion of the Community Grant Program budget to be reserved for later in the year for Youth Competitions/Performances.
Before the Community Grant Program absorbed the Championship Team Trust Fund, $36,000 was budgeted annually for youth participation in championship games. In FY 2023/24, $18,265 was awarded for youth participation in competitions and performances (inclusive of sports, academics, etc.). Staff recommends leaving the current Policy language in its current form and re-visiting this in the future if the program budget is exhausted before youth groups/individuals have a chance to apply upon advancement to their respective competition or performance.
49ers Grant Commitment
As part of the Santa Clara Stadium Authority (Stadium Authority) and Levi Strauss & Co.’s (Levi’s) ten (10) year Naming Rights Agreement extension which was approved by the Stadium Authority Board on January 30, 2024, the Forty Niners SC Stadium Company LLC (49ers) committed to providing $4 million ($200,000/annually over 20 years) for grants to non-profits or community projects serving the Santa Clara community.
On June 4, 2024, the City Council approved an Initial Grant Funding Agreement between the City and 49ers (Attachment 8). In the agreement, the 49ers’ commitment to contribute $200,000 annually for 20 years to non-profit organizations and community projects serving or directly impacting the City of Santa Clara community is referred to as the “49ers Grant Commitment”. The Initial Grant Funding Agreement directs $50,000 annually for the initial three years to the City’s Community Grant Program.
Per the Initial Grant Funding Agreement, City staff will determine the grant recipients in accordance with the City’s Community Grant Program guidelines, after consultations with the 49ers or its designee. Staff has developed a consultation process with the 49ers’ designee in which staff reaches out to the 49ers’ designee to communicate the City’s intention to utilize the 49ers Grant Commitment grant funds for grant applications that have been approved through the City’s application review process and allow the 49ers designee the opportunity to seek clarification or ask questions, if necessary. The City retains ultimate approval authority over how the 49ers Grant Commitment funds are awarded. Staff plans to prioritize use of the 49ers Grant Commitment grant funds when awarding grants through the Community Grant Program as the Initial Grant Funding Agreement requires City distribution of amounts designated for the Community Grants Program be made in the corresponding fiscal year.
The 49ers Grant Commitment has been incorporated into a larger initiative managed by the 49ers called “49ers Cares” which is separate from the 49ers Foundation. 49ers Cares focuses on community benefits specific to Santa Clara.
While establishing the consultation process with staff, the 49ers requested the City to consider acknowledgement that the Community Grant was funded by 49ers Cares, when applicable, through the available channels in the normal Community Grant Program process. As described above, when an application for a Community Grant is approved, the applicant is notified in writing. Staff recommends including language in the grant approval notification acknowledging, when applicable, that the grant was funded by the 49ers Grant Commitment to remain consistent with the terminology stated in the Initial Grant Funding Agreement.
Should the City Council approve the Governance and Ethics Committee’s recommendation to include a description of Community Grant awards on the City’s website, staff will also indicate which Community Grants are funded by the 49ers Grant Commitment.
Governance and Ethics Committee and Staff’s Recommendation
As recommended by the Governance and Ethics Committee, staff has brought forth the proposed amended Council Policy 049 and a corresponding Resolution to the full City Council for approval.
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(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
The City’s FY 2024/25 Non-Departmental Budget includes a Community Grants Program line item of $496,408. Of this amount, $96,408 reflects the annual appropriation for the Community Grants Program, while the remaining $400,000 represents Years 1 and 2 of the 49ers Grant Commitment. In alignment with the Initial Grant Funding Agreement’s Year 1 and 2 grant distribution, $300,000 of the 49ers Grant Commitment was distributed or designated to specific beneficiaries and the remaining $100,000 has been designated for the City’s Community Grant Program. In total, there is $196,408 budgeted in FY 2024/25 to administer through the Community Grant Program. Under the Initial Grant Funding Agreement, the City will also receive an additional $200,000 on or before April 1, 2026 for Year 3, of which $50,000 will be designated for the City’s Community Grant Program. These funds will be budgeted in FY 2025/26.
As discussed above, staff recommends bringing forward any potential carryovers of unspent Community Grant Program funds as part of the adopted budget or budgetary year end process for City Council consideration. It is important to note that all 49ers Grant Commitment funds for the Community Grant Program must be used for such purpose. Under the Initial Grant Funding Agreement, City distribution of amounts designated for the Community Grants Program shall be made in the corresponding fiscal year.
COORDINATION
This report was coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
ALTERNATIVES
1. Approve staff’s recommendation; or
2. Any other City Council direction regarding amendments to the Community Grant Policy.
RECOMMENDATION
Recommendation
Adopt a resolution approving amendments to Council Policy 049 (“Community Grant Policy”) that enhance grant eligibility requirements and criteria, promote accountability/increased protections for the City, and expand post event requirements for grant recipients.
Staff
Reviewed by: Christine Jung, Assistant to the City Manager, City Manager’s Office
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Current Council Policy 049 (“Community Grant Policy”)
2. Proposed Policy Amendments Approved by the Governance and Ethics Committee on July 2, 2024
3. Proposed Policy Amendments for City Council Approval (Redline)
4. Proposed Policy Amendments for City Council Approval (Clean)
5. Draft Resolution
6. Community Grant Policy Proposed Amendments Summary
7. Community Grant Application
8. Initial Grant Funding Agreement between the City and 49ers