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08 Staff Report PREPARED BY: Ryan Baker Library Director Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 02/04/2020 ITEM NO: 8 DATE: January 21, 2020 TO: Mayor and Town Council FROM: Laurel Prevetti, Town Manager SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program RECOMMENDATION: Approve a proposed update of the Town’s Community Grant program. BACKGROUND: The Town of Los Gatos has been awarding community grants for over twenty-five years, creating a resolution in 1992, revised in 1993 (Resolution 1993-173), to support community groups working towards the benefit of Los Gatos residents with grant funding. Until FY 2011/12, community grants were administered by the Town of Los Gatos Community Services Department. This Department administered an approximate average of $100,000 of General Fund money for grants as well as an approximate average of $36,000 of federal Community Development Block Grants (CDBG) funds to local non-profit agencies each year. In FY 2011/2012, the Community Services Department was dissolved. At that time, administration of the community grant program was moved to the Town Manager’s Office and CDBG funds were diverted to the County of Santa Clara’s Housing and Community Development Advisory Committee for distribution. Since that time, grant funding has been allocated from the General Fund in amounts ranging annually from $103,000 to $142,000. Application review and award recommendations currently fall under the purview of the Arts and Culture Commission (ACC) and the Community and Senior Services Commission (CSSC) with final approval of awards resting with the Town Council. Outside of the grant process, in FY 2017/2018 and 2018/2019, the Town awarded an additional $19,000 and $10,000 respectively to a community organization for the creation of community events; an award of this type could be interpreted as a grant and folded under the community grant program in the future. PAGE 2 OF 6 SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program DATE: January 21, 2020 BACKGROUND (Continued) In 2015, Council asked staff to review the community grant application process. In 2018, the ACC and CSSC revised the application process to streamline the workload and remove processes more closely related to CDBG funds that were no longer necessary. During the Fiscal Year 2019/20 budget process, Town Council requested a review of the Town’s grant program and opportunities to align it with the Town’s current priorities. Staff returned to Council in September of 2019 to seek direction on variables that would shape the future of the program. DISCUSSION: Based on the Council input, staff is recommending an update to the Town’s Community Grant program. Staff has incorporated the majority consensus recommendations from Councilmembers from the September 3, 2019 meeting. Additional recommendations for change in other areas have been incorporated after further staff analysis and review of best practices for grant making organizations and practices of our neighboring cities. Based on this input, all of the recommended updates to the program are as follows: • Move the timeline for the grant application cycle to begin after approval of the Town’s annual budget; • Approve the total amount to be distributed for community grant awards as part of the annual budget process; • Establish three types of grants to balance incentive for new initiatives along with long- term support of traditional human services programs; • Align grant categories with Council priorities; • Incorporate Community Vitality and Events as categories eligible for community grants; • Default to a single fair and competitive process that Council, Commission, and staff can direct the public and community groups towards when funds are requested for projects, ideas, or events; and • Improve communication to the public regarding the application and award process. With respect to the first two items, based on Council input and analysis of our working process, staff recommends changing the process by which community grants are budgeted. Currently, the Town opens the grant application process in either January or February and recommends grant awards in May or June based on a presumed amount of funding to be approved for the next fiscal year. Instead, staff recommends that the annual budget set a total community grants budget. After the budget is approved, then the grant application process would occur with awards determined administratively with input from the appropriate Commission. This approach provides numerous advantages. First, this allows Council to adjust the grant allocation budget in times of surplus or recession and effectively communicate those changes or constraints to the community prior to the grant process commencing. This would help in PAGE 3 OF 6 SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program DATE: January 21, 2020 DISCUSSION (Continued) managing expectations from grant applicants. Secondly, Commissions reviewing grant applications have a firm budgeted dollar amount to refer to when assessing grant proposals which would help greatly in managing the recommendation process. Third, a set budget should mitigate community requests for grant reconsideration or additional funding requests at the budget adoption meetings, as the opportunity to apply for funding will take place after these hearings. As the grant budget would already be approved by Council for the fiscal year, the ACC and CSSC recommendations for awarding grants would not need to be brought back before Council for final approval unless Council gives direction to do so. The third and fourth elements of the grant process update include: • Establish three types of grants to balance incentive for new initiatives along with long- term support of traditional human services programs and • Align grant categories with Council priorities. Based on the Council’s input, which reinforces general consensus from both the ACC and CSSC, staff recommends the grant program primarily focus on and promote grant applications for one-time outcome-based projects, events, or services that either culminate in a finished project or launch a new service by the end of the grant period, and/or are sustainable in the future without the need for continued funding from the Town. Simultaneously, staff recommends continuing to support on-going human services projects traditionally funded by the Town with a longer-term commitment. To accomplish this, staff recommends three types of community grants: One-Time Grants for Non-Profits The first would be a set number of one-time grants to a maximum dollar amount determined by staff working with the ACC and CSSC based on the amount budgeted for that fiscal year (e.g., five available grants up to a maximum of $8,000). These would be made available to non-profit community groups with the intention that the grants would assist in the creation of a new project, service, event, or initiative that would benefit the Los Gatos community. Innovation Grants for Community The second would be a small number of one-time small grants, not exceeding $1,500 (e.g., three available grants of up to $1,500) to assist any community member, student, or community group without non-profit status to launch a project or innovative idea that aligns with Council priorities and would benefit the Los Gatos community. This type of grant program PAGE 4 OF 6 SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program DATE: January 21, 2020 DISCUSSION (Continued) is growing in popularity in California as an incentive to invest in civic-minded thinking from members of the community. Human Services Sustainability Grants The third would be a set number of grants with a dedicated longer-term commitment to support on-going human services programs that the Town has traditionally funded in the past. At the meeting on September 3, 2019, there was majority Council consensus for financial support for on-going human service organizations. The Council discussed the possibility of providing funding outside of the grant process. After fully analyzing the long-term commitment, staff finds that moving this funding out of the grant process would also remove the oversight and accountability provided by the CSSC in terms of review of project objectives and stewardship of funds. Additionally, this may lead to expectations by community groups that the Town would continue honoring grants regardless of economic downturns or future funding priority changes. Given these considerations, staff recommends that human service groups that have received grant funding for the same ongoing project/service continually for the past five or more years be given the opportunity to apply for a single grant that would encompass two years of committed funding with an option for renewal at the end of the two-year period. The programs that would qualify for this option are: Counseling and Support Services for Youth (CASSY), Live Oak Adult Day Services, Live Oak Senior Nutrition Service, Next Door Solutions to Domestic Violence, and West Valley Community Services. Should an organization choose this option, they would be disqualified from applying for other grants offered by the Town during that period. The two-year commitment would allow for a greater degree of financial certainty for these community organizations and reduce workload for staff. It is noted, however, that during the budget process, funds would need to be allotted for a two-year period. Where appropriate, Strategic Priorities set by Council as part of the annual priority setting meeting in January would be communicated to the ACC and CSSC and incorporated as a component of the application scoring rubric to ensure that community grant projects and services align with any changes to Council priorities in future years. The fifth element of the proposed update recommends: • Incorporate Community Vitality and Events as categories eligible for community grants. Based on both Council and Commission input, staff recommends continuing with Human Services, Arts, and Education (defined as anything relating to education, not exclusive to arts PAGE 5 OF 6 SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program DATE: January 21, 2020 DISCUSSION (Continued) education) as categories for grants, and also adding the categories of Community Vitality and Events which would be broadly defined and include events open to the community, environmental sustainability initiatives, and other areas that would not fit under past defined categories. Staff believes that organizations requesting funds for new downtown projects, events, or other activities that add to the vitality of the Town would be best served by participating in the community grant process as opposed to direct requests to Town staff, Commissions, or Council. The final two recommendations for the updated community grants process are: • Default to a single fair and competitive process that Council, Commission, and staff can direct the public and community groups towards when funds are requested for projects, ideas, or events and • Improve communication to the public regarding the application and award process. Based on general consensus from the Council input, staff wishes to establish the following guidelines and to ensure the community grant process is fair to all applicants. First, staff would rework the application guidelines to communicate clearly with the public that grant funds are both budgeted at a set amount and finite; and further, that this process is the single opportunity per year to apply to receive funding. Second, grants selected to receive funding would be awarded the full amount requested in the application up to the maximum amount made available for each type of grant. Third, applications would be evaluated competitively only on the strength of the written application as submitted, and submitted applications would be rated on a standard scoring rubric shared by both the CSSC and ACC. Fourth, limit applications to one per organization (or individual in the case of the above- mentioned Innovation Grants) per grant cycle. Finally, grant recipients would give a presentation at the end of their grant cycle describing the overview and outcomes of their grant. Staff recommends that this presentation be done by recorded video with the intention that it will be posted for public viewing on the Town’s website. Should Council prefer that this presentation be made in person before a regular meeting of Council, staff can make this a requirement for the grant recipient. CONCLUSION: Should these changes be approved, staff will begin the process of notifying community groups that have applied for Community Grants in the past of the changes going forward. Staff would work with the ACC and CSSC to identify additional media for advertising the Community Grants with the hope of reaching a more diverse pool of applicants. PAGE 6 OF 6 SUBJECT: Approve a Proposed Update of the Town’s Community Grant Program DATE: January 21, 2020 FISCAL IMPACT: Between $120,000 to $160,000 budgeted per fiscal year for community grants as part of the annual budget process. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required.