2004/10/06 Council Agenda Packet

7 consultation with the Parks Department Director to another organization whose purpose shall be to benefit the Parks Department. If the Foundation wishes or agrees to no longer hold the Fund, it shall consult with the Parks Department Director and distribute the Fund to another organization intended to benefit the Parks Department that sustains or continues the deductibility from federal income tax of such donations for donors. In the event the functions of the Parks Department are substantially discontinued by the City, or the assets of the Parks Department are mostly transferred, assigned, or conveyed by the City to another organization to perform substantially similar functions as the Parks Department is performing at the time of the effective date of this Agreement, the Foundation shall thereafter continue to hold the Fund and shall distribute the net income and/or principal in consultation with the City to such organizations as, in the reasonable opinion of the governing board of the Foundation,most nearly meet the purposes of the Parks Depai tment. 6. Component Fund. The Fund shall be the property of the Foundation held by it in its corporate capacity and shall not be deemed a trust fund held by the Foundation in trust for another. It is intended that the Fund shall be a component or subsidiary fund of the Foundation and that nothing in this Agreement shall affect the status of the Foundation as a non-profit organization described in Section 501(c)(3) of the Internal Revenue Code. This Agreement shall be interpreted in a manner consistent with the foregoing intention so as to conform to any applicable requirements of the Internal Revenue Code and IRS Regulations. Any provision of this Agreement that contradicts or endangers the Foundation's status as a tax-exempt foundation under the Internal Revenue Code shall be deemed severed from the Agreement and of no effect. 7. Foundation Costs. The parties agree the Foundation may reimburse itself for its general and administrative or overhead costs in an amount not to exceed: two percent of donations, contributions and gifts at the time received by the Foundation into any non endowed Parks & Recreation Fund..Endowed Parks & Recreation Funds are charged an annual 1% fee, accessed quarterly;and prorated investment earnings are added to the endowment. - 8. Variance Power. It is understood and agreed that all assets held in the Fund shall be subject to the Articles of Incorporation and Bylaws of the Foundation, including the power contained therein for the governing board of the Foundation to modify any restrictions or conditions on the distribution of funds for any specified charitable purpose or to specified organizations if, in its sole judgment, such restrictions become,in effect, unnecessary, incapable of fulfillment or inconsistent with the charitable needs of the area served by the Foundation. 9. Indemnification. The Foundation hereby agrees to save the City, its officers, employees and agents harmless and indemnify them from all loss, claims or damage occasioned to the City, its officers, employees or agents or to any third person or property by reason of any act or omission of the Foundation, its employees, subcontractors or agents which arises as a result of this Agreement, and shall, after reasonable notice thereof, defend and pay the expense of defending any claim or suit which may be commenced against the City, its officers, employees or agents, or any third person alleging injuries to person and/or damage to property by reason of such act or omission and will pay any judgment which may be obtained against the City, its officers, employees, agents or third persons in such suit. Nothing herein shall require the Foundation to indemnify and hold harmless the City, its 25 2 -