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City and Lions Club clarify insurance, ownership and charity-proceeds rules for community building
Summary
At a council meeting, the city attorney and Lions Club representatives reviewed a draft lease, clarified that the city typically insures the building structure while the club must insure liability and contents, and outlined how the 10% charitable-gambling remittance to the city must be tracked separately from earmarked donations for building maintenance.
Bob Vos, the city attorney, told the council and Lions Club members that the proposed lease for the Lions’ community building is a reasonable, short document running through 2042 and can be a workable starting point as long as a few items are clarified. "If a city is going to lease out a city facility ... the city would insure the structure itself," Vos said, adding that users commonly must carry liability and contents coverage for items they place in the facility.
The group focused on Section 11 of the proposed lease, which the attorney said reads as if both parties insure the building; that overlap prompted concerns about duplicate premiums. Lions representatives said the city has historically insured both structure and contents and that Lions donations and labor have funded roughly $350,000 in upgrades over the past five to six years. Vos recommended adding a sentence that clarifies ownership and insurance responsibility for equipment purchased with city funds and proposed that the Lions reimburse the city for the portion of insurance premiums tied to city-owned personal property used in the building.
Beyond insurance, the meeting clarified how charitable-gambling proceeds are accounted. Vos explained that state law and City Code chapter 116 require charitable-gambling organizations to remit at least 10% of their profits to the city; that 10% must be unrestricted city revenue, while any additional funds can be donated with restrictions. "The 10% part can't be restricted," Vos said, and the city must be able to verify that it receives the correct amount. Council members asked the Lions for routine reporting and proposed two separate city line items: one to record the mandatory 10% allotment and another to hold any earmarked building-maintenance donations.
Council members and Lions leaders also discussed practicalities: whether earmarked donations (for example, toward a future roof) can accumulate across years, how the city must contract for work paid from those donated funds, and whether volunteers can be reimbursed when they purchase materials. Vos noted that when the city is the contracting party it must follow public procurement rules (public bidding if a project exceeds thresholds and records of multiple quotes if under the threshold). Lions representatives confirmed they had a $10,000 check ready to deposit for the building fund and agreed to provide clearer reporting of proceeds going to the city.
Next steps include drafting brief clarifying language to the lease about ownership and insurance premiums, the city creating a dedicated Lion Building Fund accounting line, and the Lions working with staff to establish a reporting cadence for charitable-gambling remittances and earmarked donations. The council did not make substantive changes to the existing lease at this meeting but directed staff and the Lions to work out clear wording before bringing the final agreement to the council.
