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Fountain Valley council holds study session on Community Foundation; staff urges MOU and insurance tweaks
Summary
City staff presented the history, finances and liability risks of the Fountain Valley Community Foundation and recommended MOU updates, volunteer waivers and event insurance; council members and volunteers debated whether a volunteer email encouraging attendance could be seen as political pressure.
Rob Frizzell, the city’s recreation and community services director, opened a May 20 study session by asking the council to review the Fountain Valley Community Foundation’s legal status, finances and the city’s potential liability under an existing memorandum of understanding.
The foundation, incorporated in January 2008 and granted 501(c)(3) public charity status in March 2009 after board-composition changes, operates as an independent nonprofit that raises and manages money earmarked for city events and programs. "The Fountain Valley Community Foundation has donated millions of dollars to the city," Frizzell said, and staff noted that the foundation’s budgets and annual statements are posted on the city website alongside council agendas and minutes.
Heather, the city’s risk manager, told the council the city is tightening protections. She said staff is working with the foundation to require special-event general and liquor liability through the city’s alliance program, to introduce volunteer waivers and to revise vendor contracts and the MOU to add stronger indemnification language so the foundation bears liability for negligence tied to its activities. "We are also working with the foundation to reduce risk and liability to the city," she said.
Matt Taylor, president of the Foundation, described the group as a volunteer "booster club" for the city, listing outreach and fundraising activities and giving volunteer metrics for 2024. Taylor said the foundation raises "close to over $200,000 a year" that is earmarked for city events and grants.
The presentation explained the Summerfest MOU: the foundation processes vendor contracts and receives a 2% administration fee for that work; the MOU requires at least 50% of net Summerfest revenues be held in a reserve account, with caps on distributions to city departments and community projects when funds are available. Staff clarified that some legacy reserve money predates the 2023 MOU and remains in the city’s accounts.
Mayor Buie raised an internal concern after seeing a foundation memo asking volunteers to attend the meeting. "While unity is important, tonight is an important matter," he said, adding that an invitation that excludes an alternate board member "could unintentionally be perceived as a political pressure." Taylor replied that he had emailed the volunteer roster, not the board, and that volunteer and board lists are kept separately; several volunteers and past presidents in the public audience pushed back, asking council members to coordinate offline and praising the foundation’s contributions.
After public comment and council discussion, staff recommended the council keep the current working relationship and allow staff to continue implementing risk-management changes; council members asked staff to update the foundation’s Secretary of State filings and to pursue the proposed MOU and insurance clarifications. The item was left for council direction rather than a formal ordinance change.
The council moved on to other agenda items after asking staff to return with any recommended bylaw or MOU amendments and with corrected filings.
