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HomeMy WebLinkAbout5.183 Amendment5.183 AMENDMENT TO AGREEMENT FOR PORT ANGELES FINE ARTS CENTER THIS AMENDMENT is made and entered into as of 31 December 2015 by and between the CITY OF PORT ANGELES (hereafter called the "CITY ") and the Trustees (and their successors) designated in Article Six of the Last Will and Testament of Esther B. Webster dated March 19, 1984, and the First Codicil dated September 21, 1984 (hereafter the "Will ") and Port Angeles Fine Arts Center Foundation (hereafter the "Foundation "), a 501(c)3 corporation. RECITALS Whereas, under the Will of Esther B. Webster the residue of her estate was left to the City of Port Angeles on condition that the City develop a plan to establish and operate a fine arts center utilizing her residence property and other financial assets that were part of the residue of her estate for this purpose. The gift required the presentation of a plan by the City sufficient to carry out the purpose of this gift. Whereas, the Will designated a group of Trustees to act with specified authority under the terms of the Will that included approval of the City's plan for the operation of the fine arts center. The Will also provided for a larger group to act as advisors to the City with respect to the fine arts center management and operation. Whereas, the residue of the estate established an endowment fund designated to be used in support of the fine arts center. Whereas, the City did develop a plan to establish and operate a fine arts center utilizing Esther B. Webster's residence property and other financial assets, and the Trustees approved that plan. Whereas, to implement the plan developed by the City and approved by the Trustees, the City and the Trustees entered into an "AGREEMENT FOR PORT ANGELES FINE ARTS CENTER" dated �2Mb-et k1, 1985 (hereafter the 1985 Agreement). A copy of the 1985 Agreement is attached hereto as Exhibit A. Whereas, over time, one or more separate organizations were developed in support of the fine arts center operations. In 2010, those organizations were merged into one Washington non - profit corporation, now known as the Port Angeles Fine Arts Center Foundation, a 501(c)3 corporation. The Foundation membership includes the successors to the original Trustees designated in the Will as well as a board of advisors and supporting members. These successor Trustees continue to act with the authority granted to them by the Will and the authority granted to the Trustees under the 1985 Agreement. Whereas, the City has proposed an amendment to the 1985 Agreement, seeking to redefine the scope of its duties and responsibilities with respect to the fine arts center. Whereas, the Trustees have agreed to changes in the 1985 Agreement as more specifically set forth herein. NOW, THEREFORE, it is hereby agreed that the 1985 Agreement is amended as follows: AMENDED AGREEMENT 1. Paragraph 1 of the 1985 Agreement is amended to read as follows: City to Continue as Trustee of Real Property. The City of Port Angeles shall hold all real property and permanent fixtures received from the Esther B. Webster Estate (the Trust Real Property) in trust, for administration in accordance with the terms of her Will and the 1985 Agreement, as amended. The City shall not charge the Trustees or the Foundation rent for the use of the real property as a fine arts center. The Trustees shall hold in trust the monetary portion received from the Esther B. Webster Estate (hereafter the Webster Estate Endowment Fund), (presently maintained with D.A. Davidson investment company) for administration in accordance with the terms of the 1985 Agreement, as now amended. The beneficiaries of each trust are the citizens of the City of Port Angeles, although the City and the Trustees or their successors shall also have standing to enforce this Agreement. As trustee, each party shall be considered the trustee of an express trust with all of the powers, duties, and limitations applicable to trustees under Revised Code of Washington Title 11, except as expanded, limited, or otherwise modified under this Amendment, the 1985 Agreement, or the Will. The City will not receive a fee or other direct compensation for acting as trustee under this Amendment, the 1985 Agreement, or the Will. The City waives fees or other direct compensation for acting as trustee under 2 this Amendment, the 1985 Agreement, or the Will. 2. Paragraph 2 of the 1985 Agreement is amended to read in its entirety: Segregated Holdings and Accounts. The City shall continue to hold the Trust Real Property in trust and keep it separate and apart from its other real property holdings. The City shall not comingle Webster Estate real property with any other property that it owns or manages. The Trustees shall segregate the Webster Estate Endowment Fund, and keep it and its earnings separate from any other funds or assets, including any funds or assets separately held or managed by the Foundation; provided, however, that funds within the Webster Estate Endowment Fund may be invested in a common investment portfolio with Foundation assets in order to maximize the rate of return, as long as the Webster Estate Endowment Fund and earnings attributable to it remain earmarked and are separately accounted for. Paragraph 3 of the 1985 Agreement is amended to read in its entirety: Preservation of Principal. The Trust Real Property received by the City from the Webster Estate shall continue to be held by the City in trust and no real property received by the City from the Webster Estate shall be sold. With respect to the Webster Estate Endowment Fund, no expenditures of principal shall be made except with the prior written approval of at least two - thirds (2/3) of the then qualified and acting Trustees. Subject to the foregoing, the principal of the Webster Estate Endowment Fund shall continue to be maintained as an endowment with only the income being used to finance annual operations of and other expenditures for the fine arts center. 4. Paragraph 4 of the 1985 Agreement is amended to read in its entirety. Management of Real Property. The Trust Real Property shall continue to be used as the site of the fine arts center, as provided in the 1985 Agreement as amended. The City shall continue to be responsible for the cost of maintenance of the Webster residence and immediately surrounding area in a manner consistent with fine arts center operations and for maintenance of the remaining Webster Estate real property (commonly known as "Webster's Woods "), in a "park -like" setting, consistent with the maintenance and upkeep of other City parks and facilities. The City will not provide janitorial services for the interior of the residence, but shall continue to provide grounds maintenance and upkeep. The City shall continue to maintain permanent fixtures and improvements, provided the City shall not be responsible for the care or maintenance of any temporary fixtures, furniture, art work, or art displays located in the fine arts center building. The City shall bear the responsibility and the cost for the maintenance required by this section in its individual capacity and any expenses for such maintenance shall not be funded from earnings of the Webster Estate Endowment Fund or otherwise from the Trustees. 5. Paragraph 5 of the 1985 Agreement is deleted because it involves activities that have already taken place. 6. Paragraph 6 of the 1985 Agreement is amended to read in its entirety. Modifications to Residence. The parties agree that the City has satisfactorily made and completed the Modifications to Residence contemplated in the 1985 Agreement. Subsequent modifications or improvements to the fine arts center building and surrounding real estate may be made in the future as the City, in its capacity as trustee of the real property, determines may be desirable, as long as the improvements or modifications are consistent with the use of the residence and the real property as a fine arts center. No amount of the Webster Estate Endowment Fund principal shall be used for modifications or improvements to the residence except upon prior approval of at least two - thirds (2/3) of the then qualified and acting Trustees as specified in Paragraph 3 above. Parking Lot. Paragraph 7 of the 1985 Agreement shall remain unchanged. Purpose of Fine Arts Center. Paragraph 8 of the 1985 Agreement shall remain unchanged. 9. Paragraph 9 of the 1985 Agreement is amended to read in its entirety: General Scope of Fine Arts Center Program. A regular and ongoing program LI using the fine arts center shall be established by the Trustees with the assistance of the Port Angeles Fine Arts Center Foundation, in order to provide the citizens of and visitors to the City of Port Angeles an opportunity to be exposed to the fine art movement in the Pacific Northwest, as well as generally. At a minimum, two exhibitions of art work by top - quality artists, for separate exhibition periods of from four to six weeks each, shall be presented annually. During exhibitions, the center should be open to the public, Thursday, Friday and Saturday, 11:00 a.m. to 5:00 p.m., or for other suitable operating hours as approved by the Trustees and /or the Foundation. Provided, the Trustees and /or the Foundation shall have the authority to sponsor exhibitions and conduct programming beyond the minimum requirements set forth above. In addition, programs including live fine arts programs in the form of theatre, music, instrumental and vocal, literature, essay, prose, or educational slide or movies, or lectures on art shall be presented as feasible. Additional exhibitions and programs involving the fine arts shall be held at the center as are available and within the ability of the fine arts center program, both with respect to personnel and facilities and with respect to the operating budget. 10. Other Uses of Fine Arts Center, Paragraph 10 of the 1985 Agreement is deleted in its entirety. 11. Paragraph 11 of the 1985 Agreement is amended to read in its entirety: Ongoing Consultation with Trustees. The City will consult with the Trustees and the Foundation with respect to its management of the fine arts center real property and coordination of the same with fine arts center exhibitions, events and operations. 12. Paragraph 12 of the 1985 Agreement is modified to read in its entirety: Operating Structure of the Fine Arts Center. The Foundation shall be responsible for the administration and operation of the fine arts center, subject to the authority of the Trustees with regard to management of the Webster Estate Endowment Fund and the authority of the City with regard to management of the Trust Real Property. Provided, the Foundation shall consult with the Trustees and their successors on all aspects of administration and operation of the fine arts center and the Trustees shall remain solely responsible for the management of and distributions from the Webster Estate Endowment Fund. The Foundation and the Trustees shall have authority to retain the services of a director for the center together with such other employees as they may determine. The general responsibilities of the director and other employees as well as the overall operating budget shall be determined by the Foundation and the Trustees subject to the final authority of the Trustees with regard to use of the Webster Estate Endowment Fund. Any director appointed may be a Foundation employee or an independent contractor. Compensation of the director and other employees shall be part of the center's regular operating budget. 13. Paragraph 13 of the 1985 Agreement is amended to read in its entirety: Program Management. The Fine Arts Center Program management, including selection, scheduling, and budgeting, as well as general policy for operations of the center, shall be determined by the Foundation and the Trustees, together with input from such employees as they may determine. Primary responsibility for any particular aspect of operation of the center may be delegated, subject to the Foundation's overall responsibility for administration and operation of the center and the Trustee's responsibility for fiscal management of the Webster Estate Endowment Fund. 14. Paragraph 14 of the 1985 Agreement is amended to read in its entirety: Financing of Operations. The Webster Estate Endowment Fund, now held in trust by the Trustees, shall continue to be held and managed under the terms of the Will in the same manner as previously managed and subject to the same rights and responsibilities of the City when it acted as Trustee of the Webster Estate Endowment Fund. Income of the Webster Estate Endowment Fund shall be available to fund the annual and regular operations of the center. Even though the actual income from the Webster Estate Endowment Fund may be insufficient to provide for the planned operation of the center during any annual period, or over a longer time period, principal from the Webster Estate Endowment Fund shall not be available for the regular operating budget except with Trustee approval as specified in Paragraph 3 above. The form and contents of the annual budget shall be determined by the Foundation and the Trustees. The City may, if it so elects, subsidize the operations of the fine arts center. The City, tel however, remains under no obligation to subsidize or pay any deficits in the fine arts center's operating budget. 15. Paragraph 15 of the 1985 Agreement is amended to read in its entirety: Indemnification and Insurance. A. Indemnification. The Foundation and the Trustees shall indemnify and hold harmless the City, its officers, officials, employees and volunteers from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or in connection with the failure of the Foundation or the Trustees, respectively, to perform their duties under the terms of this agreement. The City shall indemnify and hold harmless the Foundation and the Trustees, respectively, their officers, officials, employees and volunteers from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or in connection with the failure of the City to perform its duties under the terms of this agreement. B. Insurance. The City shall be responsible for providing adequate hazard (all -risk) insurance for the real property that it holds in trust including the building and improvements thereon. Such insurance shall be in the amount of the full replacement value. The parties recognize that the City may meet its insurance obligations through its general "self- insurance" or "risk pool" insurance program. In the event any such insurance of the self- insurance program is insufficient to satisfy any losses covered by usual hazard (all -risk) insurance including any costs or expenses, such as attorneys' fees incurred on account of the loss, and a claim is made against the Webster Estate Endowment Fund or Trustees, or both, or they are subject to liability, the City shall reimburse the Webster Estate Endowment fund for the amount of the claim paid and expenses charged against the Webster Estate Endowment Fund and shall defend the Trustees and hold them harmless and indemnify them from such claim and costs and expenses. In addition, the City shall be personally obligated to reimburse the Webster Estate Endowment Fund or pay the cost to replace any real property of the fine arts center if a loss covered by usual hazard (all -risk) occurs and is not otherwise adequately insured. The City shall be responsible for insuring City -owned personal property located on the premises. The City hereby grants and conveys to the Foundation full and complete title and ownership of all interest it may have (if any) in existing Esther Webster artwork and any other existing artwork (including exhibits, sculptures, paintings, displays and other forms of art) presently located within the fine arts center building or located on the fine arts center grounds and other arts center real property including Webster's Woods. The Trustees and /or Foundation shall take out and maintain with a reputable insurance company, at its sole cost and expense, commercial general liability insurance against property damage or personal injury arising out of the possession, use or occupancy of the real property, with minimum liability limits of $1 million dollars per occurrence and $2 million general aggregate. Such insurance shall name the City as additional insured and shall be the primary insurance as respect to the City. Such insurance shall be endorsed to state that coverage shall not be cancelled except after thirty (30) days prior written notice to the City. The Trustees and /or the Foundation shall also be responsible for insuring any artwork owned by the Trustees and /or the Foundation. This includes artwork located within the arts center gallery building as well as artwork located in Webster's Woods or elsewhere on the property. The expense of all such insurance shall be part of the fine arts center's operating budget to be funded from the Webster Estate Endowment Fund earnings or other operating budget revenues. The Trustees and /or the Foundation shall also be responsible for Workers Compensation coverage for its employees as required by the Industrial Insurance Laws of the State of Washington. 16. Paragraph 16 of the 1985 Agreement is amended to read in its entirety: Application for Grants or Other Funding. The City is not responsible to seek or obtain additional funding for the fine arts center through governmental grants or any other source of funds. That responsibility and authority will lie with the Trustees and /or the Foundation. The City will cooperate with efforts by the Trustees and /or the Foundation to obtain such grants or other funding, as staff time allows. Grant fund matching may come from the Webster Estate Endowment Fund subject to the Trustees' approval as specified in Paragraph 3 above, provided additional grants or other outside funds may be used to reimburse the Webster Estate Endowment Fund for any such principal expended. 17. Paragraph 17 of the 1985 Agreement remains unchanged. 18. Paragraph 18 of the 1985 Agreement is amended to read in its entirety: Termination. This Agreement shall be subject to termination in the event any of the provisions of this Agreement are breached by the City. Such termination events include but are not limited to the unauthorized use of the Trust Real Property; the City's failure to provide the parking area as specified in Paragraph 7; or the City's failure to segregate the estate property from its other property. If not otherwise terminated, termination shall occur six (6) months after the City receives notice from the Trustees of the alleged breach, unless City satisfies or cures such breach within such six -month period or, in the event of any dispute, the dispute - resolution process set forth in Paragraph 21 below is not yet complete. Upon such termination the then Webster Estate real property held by the City shall revert to the Trustees or their successors. The City shall promptly convey such property to the Trustees at such time. In the event the Estate property is conveyed back to the Trustees, the property shall be administered in accordance with the Will. 19. Reference to "Trustees ". Paragraph 19 of the 1985 Agreement shall remain unchanged. unchanged. 20. Headings. Paragraph 20 of the 1985 Agreement shall remain unchanged. 21. Arbitration. Paragraph 21 of the 1985 Agreement shall remain 22. Counterpart Documents. This Agreement may be executed in two (2) or more duplicate counterparts with the same force and effect as if the parties' signatures had been made on a single document. 23: 1985 Agreement. Except to the extent amended herein or inconsistent herewith, all provisions of the 1985 Agreement are confirmed and ratified. 9 This Agreement has been signed on the dates set forth below, but effective as of the 31St day of December 2015. CITY OF PORT ANGELES, a Washington Municipal Corporation BY: u Its: TRUSTEES: A/ Date Signed: Date Signed: 0 ?//0/1& Date Signed: 62 bU � I Date signed Z 3 11�6 Date Signed:' "�ldl Date Signed: Date Signed: �C/ -r' -1 V c Date Signed: - PORT ANGELES FINE ARTS CENTER FOUNDA71\1 Date Signed:'— B v Its H