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09-20-2016 City Council Study Session Packet City of Grand Island Tuesday, September 20, 2016 Study Session Packet City Council: Linna Dee Donaldson Michelle Fitzke Chuck Haase Julie Hehnke Jeremy Jones Vaughn Minton Mitchell Nickerson Mike Paulick Roger Steele Mark Stelk Mayor: Jeremy L. Jensen City Administrator: Marlan Ferguson City Clerk: RaNae Edwards 7:00 PM Council Chambers - City Hall 100 East 1st Street Grand Island Study Session - 9/20/2016 Page 1 / 43 City of Grand Island Tuesday, September 20, 2016 Call to Order This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state law. The City Council may vote to go into Closed Session on any agenda item as allowed by state law. Invocation Pledge of Allegiance Roll Call A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda Items form located at the Information Booth. If the issue can be handled administratively without Council action, notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given. B - RESERVE TIME TO SPEAK ON AGENDA ITEMS This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak. Please come forward, state your name and address, and the Agenda topic on which you will be speaking. Grand Island Study Session - 9/20/2016 Page 2 / 43 City of Grand Island Tuesday, September 20, 2016 Study Session Item -1 General and Financial Information on Food & Beverage Occupation Tax Staff Contact: Grand Island Study Session - 9/20/2016 Page 3 / 43 9-20-16Occupation Tax Oversight CommitteeFood and Beverage Tax ReviewWilliam Clingman, Assistant Finance DirectorGrand IslandStudy Session - 9/20/2016Page 4 / 43 It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.DisclaimerGrand IslandStudy Session - 9/20/2016Page 5 / 43 Food and Beverage tax rate is 1.5%Tax is applicable to food and beverages subject to Nebraska sales tax, including alcoholic beveragesReturns are due by or must be postmarked on the 25thof the following monthLate returns are subject to a 10% penalty AND interest of 1% for each month they are lateFood and Beverage HighlightsDISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Grand IslandStudy Session - 9/20/2016Page 6 / 43 History of TaxDISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Actual FY2008-2009Actual FY2011-2012Actual FY2012-2013Actual FY2013-2014Actual FY2014-2015Actual FY2015-2016October‐ 91,358.70 128,591.02 126,792.34 134,701.66 129,020.52 November‐ 127,022.54 118,392.86 107,279.78 94,645.52 107,234.83 December40.10 97,372.09 105,476.63 128,353.71 146,485.22 141,486.71 January65,048.70 115,899.48 130,546.05 127,851.56 120,807.22 133,807.58 February75,737.13 92,053.82 98,735.02 106,413.19 109,524.05 205,365.64 March115,334.28 119,620.08 113,603.34 113,335.63 152,541.44 147,802.65 April92,325.04 120,630.67 135,539.91 126,573.61 129,539.97 162,503.45 May84,706.46 117,949.82 124,459.01 119,608.57 126,771.55 214,430.97 June106,176.11 117,056.79 100,090.23 136,786.00 157,883.23 133,374.71 July99,721.76 132,309.24 134,542.69 131,644.04 149,088.88 157,130.94 August91,016.57 127,641.94 135,692.78 134,079.05 126,500.69 186,720.80 September97,414.02 136,609.00 133,225.29 136,673.99 160,317.37 Total Receipts 827,520.17 1,395,524.17 1,458,894.83 1,495,391.47 1,608,806.80 1,718,878.80 Grand IslandStudy Session - 9/20/2016Page 7 / 43 How to calculate the tax IF charged to the customer - EXAMPLEDescription AmountTaxable Food 32.00$ Taxable drinks 18.00$ Total before taxes 50.00$ Food and Beverage Tax (1.5%) 0.75$ Total with FB Tax 50.75$ Sales Tax (7%) 3.55$ TOTAL AMOUNT OWED 54.30$ DISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Grand IslandStudy Session - 9/20/2016Page 8 / 43 TAXABLE•Fountain drinks•Hot Pizza•Sandwich Prepared by Seller•Toasted bagel with knife and cream cheeseWhat is subject to tax?NON-TAXABLE•Bottled drinks•Frozen Pizza•Sandwich Prepared at different location•Bagel purchased from bakery*DISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.*Subject to eating utensils testGrand IslandStudy Session - 9/20/2016Page 9 / 43 Three currently on payment plansThree past due and unresolvedUncle Ed’s SteakhouseCarnivore’sMcKinney’sCommercial Establishments Past DueDISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Grand IslandStudy Session - 9/20/2016Page 10 / 43 Questions or InquiresEmail: occtax@grand-island.comPhone: 308-385-5428Contact InformationDISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Grand IslandStudy Session - 9/20/2016Page 11 / 43 Questions?DISCLAIMER: It is the responsibility of the business owner to consult with a tax professional and/or the Nebraska Department of Revenue. This presentation is for informational purposes only and should not be construed as tax advice from the City of Grand Island.Grand IslandStudy Session - 9/20/2016Page 12 / 43 Council Agenda Memo From:Todd McCoy, Parks and Recreation Director Meeting:September 20, 2016 Subject:Potential Food and Beverage Tax Projects and Timeline Presenter(s):Todd McCoy, Parks and Recreation Director Background In May Grand Island voters approved the extension of the Food and Beverage Occupation Tax. The City Finance Department and Administration have estimated that the tax will generate nearly $2.0 million per year. City Administration has recommended utilizing F & B revenue for Nebraska State Fair Support, Grow Grand Island, and City of Grand Island quality of life projects. The City Finance Department reports that currently the F & B fund balance is more than $1.0 million. The Grand Island Parks and Recreation Department has a long list of worthwhile and overdue projects that can benefit from food and beverage tax funding. The purpose of the presentation is to discuss potential projects, timelines, and future financing. Discussion There are four major projects that staff feels are overdue or have an immediate need: Veterans Athletic Field Complex Expansion The Veterans Athletic Complex was built as a result of the Nebraska State Fair relocation at Fonner Park. Currently, the Veterans Complex consists of twelve acres of soccer and four large softball/baseball fields. The fields are used mainly by adult leagues during the summer and fall months. Area youth baseball and softball organizations rent the fields for tournaments and games on weekends and week nights as available. The soccer fields are utilized by the Heartland Soccer Club and local Grand Island high school programs. Expanding the Veterans Athletic Field Complex will alleviate scheduling conflicts with local leagues and provide facilities to keep pace with the growing Grand Island Study Session - 9/20/2016 Page 13 / 43 demand of area competitive sports teams. With the improvements, the complex will be a desirable location for state and regional tournaments. It is estimated that the annual expense to operate the additional fields is approximately $75,000 for staffing, fuel, fertilizer, electricity, weed control, equipment, etc. Island Oasis Expansion and Update Island Oasis Water Park opened to the public in the summer of 1993. Grand Island was one of the first few municipalities in Nebraska to build a water park style swimming pool. Peak attendance during the summer of 2002 climbed to over 120,000 swimmers. Expansion projects were completed in 1995 (two enclosed slides), 1997 (lazy river), and 2002 (speed slides). The attendance in recent years averages 40,000 – 60,000 swimmers annually. It was recommended that a dedicated children’s play pool be added to Island Oasis in the 2004 Aquatic Master Plan. The recommendation was made by The Brannon Corporation, an aquatic consulting firm the City hired from Texas to assess swimming facility needs. In the study, The Brannon Corporation stated, “In order to keep its position at the top of the market place, Island Oasis must add new features, remove outdated features, and expand.” In 2007 the City hired Water Technology and Olsson and Associates to design a children’s area project. Funding has not been available to complete the project. A budget of $1.7 million is estimated to complete a dedicated children’s wet play area at Island Oasis. It is estimated that the annual expense to operate the additional expansion is approximately $50,000 for staffing, additional pool chemicals, natural gas, electricity, and maintenance. Grand Island Study Session - 9/20/2016 Page 14 / 43 Heartland Public Shooting Park 100-Meter Range The immediate need for a new range is driven by the National 4-H Shooting Championships. The National 4-H Shooting Championships has continued to grow each year. Our existing 100-meter range no longer meets their needs. Building a new range will also make HPSP more attractive to new regional and national events. Additionally, the range will enhance existing HPSP events like Zombies in the Heartland, American Marksman, Sportsman Team Challenge, Steel Challenge, and more. Engineers have estimated the new range to cost near $800,000. Grand Island Study Session - 9/20/2016 Page 15 / 43 Second Large Baseball Field The American Legion Baseball Field at Ryder Park is Grand Island’s only true large competitive baseball field. Since the addition of high school baseball and the explosion of select teams, Grand Island is in need of an additional 90’ base field. A new baseball field will accommodate more teams and take pressure off Ryder and Ashley fields. The new baseball field project including facilities is estimated to cost $750,000. Additionally, the Parks and Recreation Department has a number of ongoing needs for park updates, hike/bike trail expansion, and more. Below is a tentative list of potential projects to be completed in the next five years. 2016 Fieldhouse Turf $ 170,145 2017 Vet's Soccer Concession/Bathroom Bldg $ 250,000 2017 Lions Park Irrigation $ 50,000 2017 Sterling Parks Phase 3 $ 150,000 2017 Misc: Replace Playground, Parking Lots, etc. $ 150,000 2018 Phase II Veterans Complex $ 1,500,000 2018 Replace Original Two Water Park Slides $ 300,000 2018 Island Oasis Expansion $ 1,700,000 2018 Sterling Park Phase 4 $ 150,000 2018 Misc: Replace Playground, Parking Lots, etc. $ 150,000 2018 Hike/Bike Trail Development $ 250,000 2019 HPSP 100 Meter Range $ 800,000 2019 Seawall Sucks Lake South Bank $ 200,000 Grand Island Study Session - 9/20/2016 Page 16 / 43 2019 Baseball Field Ryder Park $ 750,000 2019 Grace Abbott Band Stand $ 100,000 2019 Hike/Bike Trail Development $ 75,000 2019 Misc: Replace Playground, Parking Lots, etc. $ 150,000 2020 George Park Field Upgrade $ 200,000 2020 Splash Pad $ 400,000 2020 Skate Park Upgrades $ 300,000 2020 Hike/Bike Trail Development $ 75,000 2020 Misc: Replace Playground, Parking Lots, etc. $ 150,000 2021 Misc: Replace Playground, Parking Lots, etc. $ 175,000 2021 Hike/Bike Trail Development $ 75,000 $ 8,270,145 Because of the immediate need of the four major projects, tentative estimates show $8.27 million of potential project expenses over a five year period. Conservative estimates show the food and beverage revenue to generate $6.25 million during the same time period. City Administration is recommending the consideration of a ten year $5 million bond. Annual bond payments are estimated at $541,623. Utilizing the bond would fund the completion of the four major projects and allow nearly half a million dollars designated for other park projects until the bond is paid off in ten years. Conclusion This item is presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to a future council action. Grand Island Study Session - 9/20/2016 Page 17 / 43 Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 18 / 43 MISSION …. Grow Grand Island cultivates bold ideas that create business and quality of life opportunities in our region through planning, partnering and doing. Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 19 / 43 5 PILLARS …. Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 20 / 43 GOALS … Help Existing Businesses Grow Assist & Nurture Entrepreneurial Culture Enhance Community Image & Marketing Activities Improve Educational Attainment that Align w/Employer Needs Continue to Develop our Community Assets Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 21 / 43 Implementation Committee Leadership team; 40+ strong Stakeholders representing health care, media, non-profits, attorneys, bankers, education, gov’t, education, ag, and community at large 5 new members Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 22 / 43 501 c 3 status … Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 23 / 43 Dave Taylor & Galen Stehlik Grow Grand Island Executive Committee Mayor Jensen & Marlan Ferguson (non-voting) Pam Lancaster & Jane Richardson (non-voting) Cindy Johnson & Kurt Haecker Brad Mellema & Tony Schultz Tonja Brown, Implementation Chair & Don Smith, Past IC Chair Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 24 / 43 Other Committee’s Grant Finance Fundraising 6 members 3 – IC 2 – Community 1 – GICF (non-vote) 4 members Exec. Treasurer CPA/Finance Prof. IC CEO, GICF (non-vote) Up to 8 members Community & IC Plus several 100s of volunteers …. Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 25 / 43 Grant process …. GGI finalizes project in committee Submits application (growgrandisland.com) App. reviewed by GGI Grant Committee Grant Committee recommendation to GGI Exec. Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 26 / 43 Grant process, cont. GGI Exec. approves GGI Exec. reviews finances Grant App. signed by GGI Exec. Chair, Grant Chair, Finance Chair, & authorized City Official (when applicable) GGI Exec. denies GGI Exec. approves different $$$ Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 27 / 43 “Imagination Takes Flight” Arts & Entertainment $15,000 / $120,140 *** Comm. Assets Pillar Grand Island Study Session - 9/20/2016 Page 28 / 43 6-7 locations $25,000/each *** Image Pillar Next Generation Signs Corridor Improve./Gateway Beauty Grand Island Study Session - 9/20/2016 Page 29 / 43 Bicycle Racks Downtown & Regional Transportation Grand Island Study Session - 9/20/2016 Page 30 / 43 The Story Telling Project Culture Engagement & Understanding Grand Island Study Session - 9/20/2016 Page 31 / 43 Horse Stalls Incentives Grand Island Study Session - 9/20/2016 Page 32 / 43 13 projects 100s of passionate volunteers $1,700,000 Growing Grand Island Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 33 / 43 Oversight Committee: FUNCTION •Advise the public and city officials with regard to the food and beverage tax; •Confirm the food and beverage tax revenues are accounted for in the designated special revenue funds; •Confirm the collected funds are being expended on eligible projects as provided by city ordinances. Grow Grand Island … A Grander Vision for the Heartland Grand Island Study Session - 9/20/2016 Page 34 / 43 Grow Grand Island … A Grander Vision for the Heartland www.growgrandisland.com Grand Island Study Session - 9/20/2016 Page 35 / 43 Council Agenda Memo From:Marlan Ferguson, City Administrator Meeting:September 20, 2016 Subject:Agreement between City of Grand Island and Grow Grand Island, Inc. Presenter(s):Jerry Janulewicz, City Attorney Background At the primary election held May, 2016, the electorate of the City of Grand Island approved by majority vote of the votes cast the imposition of an occupation tax on retailers of food and beverages at a rate of one and one-half percent on the sale of all food and beverages presently subject to sales tax at commercial establishments in the City. The voter-approved ballot measure directed the occupation tax shall be used for the following community enhancements: 1.The annual financial commitment to the Nebraska State Fair as required by state law; 2.Promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island; 3.Ongoing enhancement and development of recreational and athletic facilities such as hike, bike and recreational trails, ball fields and other community activity needs; and 4.Invest in community development projects and activities that stimulate progress and growth for Grand Island; The Grow Grand Island initiative was expected to be the recipient of funds to accomplish number 2 and 4 listed above. Grow Grand Island, Inc., a Nebraska nonprofit corporation (“GGI”), was organized and established through the effort of community minded individuals and organizations for the purpose of promoting, encouraging, and developing projects and programs to promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island and to invest in community development projects and activities that stimulate progress and growth for Grand Island. Grand Island Study Session - 9/20/2016 Page 36 / 43 City Administration believes it is in the best interests of the City, its citizenry, and the Grand Island community and area that the City enters into an agreement with GGI, for the establishment, development, operation, and maintenance of community enhancement programs within the City. Discussion The attached agreement outlines and authorizes Grow Grand Island, Inc. to receive funds and process grants on behalf of the City of Grand Island. Conclusion This item is presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to a future council action. Grand Island Study Session - 9/20/2016 Page 37 / 43 1 AGREEMENT BY AND BETWEEN THE CITY OF GRAND ISLAND AND GROW GRAND ISLAND, INC. FOR COMMUNITY ENHANCEMENT PROGRAMS. This Agreement dated this ___ day of __________, 2016, by and between the City of Grand Island, a Nebraska municipal corporation (“City”) and Grow Grand Island, Inc., a Nebraska nonprofit corporation (“GGI”), WITNESSETH: Whereas, at the primary election held May , 2016, the electorate of City approved by majority vote of the votes cast the imposition of an occupation tax on retailers of food and beverages as a rate of one and one-half percent on the sale of all food and beverages presently subject to sales tax at commercial establishments in the City; and WHEREAS, the above-mentioned ballot measure directed the occupation tax shall be used for the following community enhancements: 1.The annual financial commitment to the Nebraska State Fair as required by state law; 2.Promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island; 3.Ongoing enhancement and development of recreational and athletic facilities such as hike, bike and recreational trails, ball fields and other community activity needs; and 4.Invest in community development projects and activities that stimulate progress and growth for Grand Island; and WHEREAS, Nebraska Revised Statute Section 13-315 authorizes cities to expend up to four-tenths of one percent of the taxable valuation of the city for the purpose of encouraging immigration, new industries, and investment and to conduct and carry on a publicity campaign, including a publicity campaign conducted for the purpose of exploiting and advertising the various agricultural, horticultural, manufacturing, commercial, and other resources, including utility services, of the city. Such sum may be expended directly by the city or may be paid to the chamber of commerce or other commercial organization or a similar county organization or multicounty organization or local development corporation to be expended for the purposes enumerated in this section under the direction of the board of directors of the organization; and WHEREAS, City desires to contract with a community based, private nonprofit corporation to assist and partner with the City for the development of programs, projects, and events specifically designed to promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island and community development projects and activities that stimulate progress and growth for Grand Island; and WHEREAS, Grow Grand Island, Inc., a Nebraska nonprofit corporation (“GGI”), was organized and established through the effort of community minded individuals and organizations for the purpose of Grand Island Study Session - 9/20/2016 Page 38 / 43 2 promoting, encouraging, and developing projects and programs to promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island and to invest in community development projects and activities that stimulate progress and growth for Grand Island; and WHEREAS, GGI has and will obtain funds for its community enhancement programs through private and corporate contributions, grants, gifts, and other sources; and WEREAS, it is desirable for City and GGI to participate in a joint public-private effort for the purpose of promoting, encouraging, and developing community enhancement programs for Grand Island; and WHEREAS, such joint public-private effort enhances efficiency, promotes cost savings and increases the effectiveness of community enhancement programs that would otherwise be realized through a separate private and a separate public program; and WHEREAS, it is in the best interests of the City, its citizenry, and the Grand Island community and area that City contract with GGI, as set forth herein, for the establishment, development, operation, and maintenance of community enhancement programs within the City. Now, therefore, in consideration of the mutual promises and covenants contained herein, City and GGI do hereby agree as follows: Section 1.Recitals. The recitals contained above are incorporated herein by this reference. Section 2.Purpose. Through a joint and collaborative effort between City and GGI, the purposes of this Agreement are: (a.) the promotion, encouragement, and development of projects and programs to promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island and (b.) investment in community development projects and activities that stimulate progress and growth for Grand Island, such project and programs, herein referred to as “community enhancement programs.” Section 3.Term. The initial term of this project shall be for a period of twenty-four months commencing _______________, the “initial term”. Subject to Sections 14 and 15, the term shall automatically renew for an additional term of 24 month (the “renewal term”). Section 4.Projects. GGI shall promote, encourage, conduct, develop and fund community enhancement programs utilizing a combination of funds obtained through private and corporate contributions, grants, gifts, and other sources and through the funds hereby provided by City. Funds provided by City “City Funds” shall be maintained in a segregated account and shall be expended solely as provided for herein. Section 5.City Funds. a. City shall provide the following funds, derived from city’s occupation tax of food and beverage retailers in such amounts and such schedule as set forth herein: November 1 of each year $500,000.00 minimum. Amount could increase with approval by the City Council Grand Island Study Session - 9/20/2016 Page 39 / 43 3 Section 6.Limitation on Use. City Funds shall be utilized and expended by GGI solely for such project, programs and purposes that serve and carry out a public purpose as expressly authorized, necessarily or fairly implied in or incidental to those expressly authorized and those essential to the declared objects and purposes of a city of the first class as expressed by Nebraska statutes as from time to time amended. Such projects, programs and purposes shall encompass and be directed toward encouraging immigration, new industries, and investment and to conduct and carry on a publicity campaign, including a publicity campaign conducted for the purpose of exploiting and advertising the various agricultural, horticultural, manufacturing, commercial, and other resources, including utility services, of the city; to promote entertainment, agricultural and livestock shows, trade shows and similar events that will attract visitors to Grand Island; and investment in community development projects and activities that stimulate progress and growth for Grand Island. No more than 10% of the City Funds will be allowed to be used for employee and office expenses. Section 7.Approval by City Administrator. Prior to expending City Funds for a community enhancement project, a summary of the project including such detail and supporting documentation as required by City shall be submitted to City’s city administrator or his or her designee for approval. Section 8.Accounting. On an annual basis, GGI shall submit its financial audit to City. The audit shall be prepared by a Public Accountant or Public Accountancy firm licensed and authorized to engage in public accountancy within the State of Nebraska. Section 9.Reports. On a quarterly basis GGI shall provide to City full and complete reports of its activities, programs and projects and an accounting of its receipt and expenditure of public and private funds. Said reports shall be in such form and include such detail as specified by City’s Finance Director or his or her designee. Section 10.Access to Records. During normal business hours, City shall be provided with access to review, inspect, and photocopy records of GGI pertaining to the funding and expenditure of public and private funds for community enhancement projects. Such records shall be maintained by GGI for not less than 60 months following termination of this agreement. Section 11.Termination. Within 30 days of the expiration of the initial term or subsequent renewal term, or earlier termination as provided herein, all remaining and unobligated City Funds held by GGI shall be returned to and paid to City for deposit in City’s food and beverage retailer occupation tax fund. Section 12.Segregation of Funds. City Funds shall at all times be maintained by GGI on deposit in a national chartered bank in accounts fully insured accounts by the FDIC or, if not fully insured, shall at all times be collaterally secured by a deposit of bonds that are either direct and general obligations of or are unconditionally guaranteed as to both principal and interest by the United States of America and having a market value at least equal to the amount by which the moneys on deposit . All interest received and all profits realized on account of any such investments or reinvestments shall be added to and become a part of city-provided funds and subject to the provisions of this agreement. Section 13.Bond/Security. GGI shall, at its own expense, supply to city a fidelity bond issued by an insurance company licensed to do business in the State of Nebraska, insuring city against dishonesty or fraudulent acts of the employees of GGI in the amount of $500,000.00 per employee. Section 14.Termination for Default. In the event that City reasonably determines that GGI has failed to comply with the material terms of this Agreement in a timely manner (“Default”), City shall notify GGI in writing of the nature of the Default and of the corrective action to be taken. If corrective action is not Grand Island Study Session - 9/20/2016 Page 40 / 43 4 commenced within 5 days after receipt of written notice and completed within a reasonable time thereafter, then City may terminate this Agreement by written Notice of Termination to GGI, which termination shall take effect 30 days after delivery of the Notice of Termination. City further reserves the right to prohibit GGI from expending additional City-provided funds during the investigation of any alleged Default and pending corrective action by GGI or a decision by City to terminate the Agreement. Section 15.Election to Terminate. Either party may elect to terminate this Agreement on the last day of the Initial Term by providing written notice of termination not less than 90 days prior to the end of the then current term. In the event that both parties fail to deliver written notice of an election to terminate, this Agreement will automatically renew for one additional Renewal Term as provided in Section 3. The automatic renewal of this Agreement shall terminate in the event of the termination of this Agreement prior to the expiration of the Initial Term pursuant to the terms of this Agreement. Section 16.Discrimination. With respect to the activities conducted by it pursuant to this Agreement, GGI will not subject any person to discrimination on the bases of race, color, religion, sex, national origin or ancestry. Section 17.Procurement. GGI shall adopt, subject to City’s approval, a procurement policy that shall provide for open, competitive bidding for purchases of or contracts for materials, supplies, services or labor in the amount of $20,000 or more and shall prohibit contracts between GGI and members of its board of directors and members of their families. Section 18.Miscellaneous. a.Interpretation. Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders. Days, unless otherwise specified, shall be calendar days. b.Severability. In the event any covenant, condition or provision herein contained is held to be invalid by a court of competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no way affect any other covenant, condition or provision herein contained, provided the invalidity of any such covenant, condition or provision does not materially prejudice either City or FP in its respective rights and obligations contained in the valid covenants, conditions and provisions of this Agreement. c.Binding on Successors. Subject to the provisions of SECTION 32, this Agreement binds and inures to the benefit of the parties and their respective successors and assigns. d.Headings. The headings of the sections and exhibits of this Agreement are inserted for convenience only; they do not constitute part of this Agreement and are not to be used in its construction. e.Authority of City Administrator. Where this Agreement requires or permits City to act and no officer of the City is specified, the City Administrator of the City or the designated representative of the City Administrator has the authority to act on City’s behalf. Section 19.Hold Harmless. Hold Harmless. GGI shall, and does hereby agree to, have the right and obligation to defend, save, indemnify and hold the City, its corporate authorities, elected and appointed officials, officers, boards, commissions, legal counsel, employees and agents harmless from any injury, claim, demand, suit, judgment, execution, liability, debt, damages or penalty (the "Claims") arising out of resulting from, or alleged to arise out of or result from, GGI's performance of this Agreement. Grand Island Study Session - 9/20/2016 Page 41 / 43 5 Section 20. Insurance. a.General Liability. GGI shall maintain, throughout the term of the Agreement, general comprehensive liability insurance insuring both GGI and the City, and its officers, boards, commissions, elected and appointed officials, agents and employees, in the minimum amounts of: $1,000,000 for bodily injury or death to each Person; $1,000,000 for property damage resulting from any one accident; and $1,000,000 for all other types of liability. b.Automobile. GGI shall maintain in its own name automobile liability insurance with a limit of $1,000,000 for each person and $3,000,000 for each accident for property damage with respect to owned and non-owned automobiles for the operations of which GGI is responsible. c.Worker's Compensation. Worker's Compensation. GGI shall also maintain Worker's compensation Insurance within the statutory limits. d.Evidence of Insurance Policies. Evidence of Insurance Policies. On or prior to the effective date, GGI shall furnish proof to the City Administrator that the foregoing insurance policies have been obtained, along with written evidence of payment of required premiums, in the form of a certificate of insurance. e.Maintenance of Insurance Policies. Maintenance of Insurance Policies. The liability insurance policies required by this section shall be maintained by GGI throughout the term of the Agreement. Each such insurance policy shall contain the following endorsement: It is hereby understood and agreed that this policy may not be canceled nor the intention not to renew be stated until 90 days after receipt by the City, by registered mail, of a written notice addressed to the City Administrator of such intent to cancel or not to renew. f.Within 60 days after receipt by the City of said notice, and in no event later than 30 days prior to said cancellation, GGI shall obtain and furnish to the City replacement insurance policies in a form acceptable to the City Attorney. Section 21.Assignments, Transfers and Similar Actions. Neither the Agreement nor any rights or obligations of GGI pursuant to this Agreement shall be assigned, transferred, pledged, leased, sublet, hypothecated or mortgaged in any manner, in whole or in part, to any person, either by act of GGI, by operation of law or otherwise, without the prior consent of the City. Any such action completed without such prior consent of the City shall be a violation of this Agreement and shall, at the option of the City, which option may be exercised in the City's sole judgment and discretion, allow the City to initiate termination of this Agreement. The grant or waiver of any one or more of said consents shall not render unnecessary any subsequent consent or consents, nor shall the grant of any said consent constitute a waiver of any other rights of the City. Section 22.Entire Agreement. This Agreement contain all of the agreements, representations, and understandings of the parties hereto, and, subject to the last sentence of this paragraph, supersede and replace any previous understandings, commitments, or agreements, whether oral or written. Section 23.Third Party Beneficiaries. The provisions of this Agreement are intended solely for the benefit of City and GGI, and create no rights or obligations enforceable by any third party, including any creditor of City or FP, except as otherwise provided by applicable law. Grand Island Study Session - 9/20/2016 Page 42 / 43 6 Section 24.Effectiveness Subject To Appropriation. The parties agree and acknowledge that it is a prerequisite to the effectiveness of this Agreement that moneys be appropriated in an amount sufficient to fund the obligations of City under this Agreement. City and GGI further agree that, in the event that the City Council does not appropriate the funding for this Agreement, it shall become null and void. CITY OF GRAND ISLAND GROW GRAND ISLAND, INC. BY _________________________________ Jeremy L. Jensen, Mayor BY _________________________________ ATTEST: _______________________________ RaNae Edwards, City Clerk Grand Island Study Session - 9/20/2016 Page 43 / 43