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HomeMy WebLinkAboutStaff ReportSTAFF REPORT FOR YMCA MAINTENANCE AND OPERATING AGREEMENT (COMMUNITY SERVICES) Introduction City staff has been working with the YMCA of San Diego County -South Bay via ad hoc committee and recreation working group meetings for almost two years to negotiate a maintenance and operating agreement for the National City Municipal Pool and Camacho Gym. The item before you seeks approval of a maintenance and operating agreement containing the deal points detailed below, and in substantial conformance with the draft agreement attached (with City Council input on certain issues). Overall, this maintenance and operating agreement would turn over the pool and Camacho gym to the YMCA for operation of programs and the maintenance of these two facilities. This maintenance and operating agreement includes only the pool and the gym at Las Palmas Park. It does not include any of the fields or other programming outside of the pool and the gym. The Community Services Department and the Public Works Department would continue to manage programming for El Toyon Park (recreation center, field, and courts), Las Palmas Park (fields and tennis courts), Kimball Park (Kimball Senior Center, fields, and skate park), Casa de Salud and Manuel Portillo Youth Center, and all other park space in National City, as well as all contract instructors in those parks (with the exception of the pool and gym). Due to the economic downturn and budgetary reductions, the Community Services Department has been working with minimal resources to sustain the programs and recreation opportunities for the community. The reduction in staffing and resources has led to reduced recreation center hours and programming for our residents, as well as rising deferred maintenance costs. If the City Council desires to continue managing the facilities and offering the current programming at the current pricing, the Community Services Department will need additional resources and staff. A partnership with the YMCA is an opportunity for the City not only to expand access to the pool and the gym, but also to save operating costs and resolve the deferred maintenance for the facilities. The YMCA is committed to structuring their pricing to fit National City resident needs, including offering scholarships for qualifying families, which is part of their national model. The YMCA also has experience and current partnerships managing recreation programs in other San Diego County cities (i.e., City of Santee). Background In 2007, National City established its Strategic Plan with goals to improve quality of life and to achieve fiscal sustainability. To achieve fiscal sustainability, the strategic plan action 2C states, "Partner with Community Organizations and Regional Agencies to Pursue Our Legislative Platform and Aggressively Seek Funding from Local, State, & Federal Sources". To improve quality of life, strategic goal 3 actions include, "Continue to Provide Recreational Programs and Community Services, Maintain Existing Parks and Public Facilities and Find Funding to Construct Park Master Plans, Partner with the Port District to Build Aquatic Center, Granger Park, and Improve Public Access to the Harbor District, and Preserve and Promote Historic Resources and Cultural Assets". 1 The City has established partnerships, and Council decisions have created the opportunity to expand partnerships to sustain programs. Established partnerships include ARTS, the Greater San Diego Boys and Girls Club in Kimball Park, and the YMCA of San Diego County -South Bay Branch in Pepper Park (Aquatics Center). After a multi -year planning effort that culminated in the adoptions of the Westside Specific Plan, the General Plan Update, and the Downtown Specific Plan Amendment, in early 2011, the Successor Agency sold bonds to build facilities to improve quality of life. At the July 5, 2011 City Council meeting, the Parks, Senior, and Youth Ad Hoc committees were initiated by Council. Since that date, recreation working group meetings have been held between the City and our potential partners, the YMCA of San Diego County -South Bay Branch and the Greater San Diego Boys and Girls Club, to discuss how the City could maximize the bond money to create sustainable quality of life facilities and programs. Because there were capital resources (bond funds), but limited operating resources, staff discussed expanding partnerships with local non -profits to sustain operations. In late October and early November of 2011, Council was provided information on the progress of the quality of life facilities plan. The first public parks ad hoc meeting took place on November 21, 2011, and included Mayor Ron Morrison, Council member Sotelo-Solis, members of the Parks, Recreation, and Senior Advisory Board (PRAB) members (who are National City residents), a Public Art Committee member, and City staff. The YMCA partnership at Las Palmas Park was discussed at that meeting, along with subsequent parks ad hoc meetings on December 13, 2011, January 19, 2012, and April 24, 2012. Additional updates were provided to PRAB. During these park ad hoc committee meetings, City staff provided reports on current programs, fees, and participation numbers, as well as facility and park maintenance costs. In addition, there was conceptual planning done by Kimley Horn and Associates to incorporate ideas and discussion by City staff, non -profits, and the public. The initial estimates for the conceptual plans at Las Palmas Park show a need for additional funding. The South Bay YMCA expressed a desire to fundraise locally to generate monies to complete the project. Because the YMCA is a non-profit, they are able to leverage funds by local fundraising campaigns resulting in more resources for a final product/facility. A draft MOU between the City and the YMCA was provided to and approved by the YMCA at their board meeting on November 30, 2011, to solidify the partnership and initiate a fundraising campaign. At the December 6, 2011 meeting, the City Council was provided an update on the YMCA Board's position and directed staff to bring the draft MOU forward for Council review in January. At the January 10, 2012 meeting, the City Council adopted Resolution No. 2012-08, approving the MOU between the YMCA of San Diego County - South Bay Branch and the City for a 12-month period of negotiation of contemplated partnership to provide sustainable programs to National City residents at Las Palmas Park. During the negotiation period, City and YMCA staff worked on a draft maintenance and operations agreement, which includes programs, pricing, maintenance, employee transition, deferred maintenance, and more based on feedback from the parks ad hoc committee and PRAB. On January 17, 2013, the YMCA presented their program plan to PRAB. PRAB voted unanimously to support the partnership with 2 the YMCA at Las Palmas Park. At a recent South Bay YMCA board meeting there was a vote to approve the terms of the draft maintenance and operating agreement. Terms of the Agreement The attached draft maintenance and operations agreement for the National City Municipal Pool and Camacho Gym includes the following deal points: • Term: Five (5) years, with a five (5) year option to extend. o The length of the term (5 years) does not raise concerns. o Unilateral option to extend: As drafted, the extension can be exercised by the YMCA if it is not in breach of the agreement. The City would not have the option to exercise an extension. The City's agreements typically provide the City the option to extend agreements either unilaterally or upon mutual agreement. The YMCA has indicated they will not agree to a mutual extension provision. • Programs: The YMCA will maintain existing levels of service, and increase programming and hours of operation at the pool and Camacho gym. • Resident Access: The YMCA agrees to provide preference to the City of National City and discounted fees to its residents. A resident will not have to be a YMCA member to have daily access to the pool or gym. They can access the facilities through a daily resident rate. The YMCA will offer a scholarship program to all National City residents who meet the income requirements. • City Access: The City can have access to Camacho gym and the pool for City community meetings upon agreement by both parties. City can use the facilities at no cost when partnering (lifeguard fees may apply for special events outside of partnerships). City recreation program participants are not required to pay fees to the YMCA. The City will have pool use for five (5) special events per year, up to five (5) hours each. • Current Rentals (school teams/leagues): The YMCA may accommodate current National City schools, swim teams, and other sports organizations at the pool. Such users shall pay for such use at a mutually agreed upon rate with the YMCA. • Employees: The YMCA will guarantee all current employees and instructors an interview. (This would affect 31 part time employees: 1 aquatics manager, 13 lifeguards, 17 recreation aides; no full time employees would be impacted.) • Annual Reporting: The YMCA will provide an annual report to the City to include National City participant numbers, total participant numbers, events coordinated, capital projects completed, total joint use time, budget, next year operating and maintenance plan and fee schedule, and any other pertinent statistics. • Notice: The YMCA will give the City notice if the pool or gym will be closed for longer than a five (5) day period. 3 • Maintenance: The YMCA will accept premises in "as is" condition. The YMCA will maintain the pool and the gym. • Deferred Maintenance: City will provide $250,000 (out of the approximate $600,000 deferred maintenance estimate) to the YMCA to address major deferred maintenance issues. The YMCA will comply with bidding requirements in addition to prevailing wage. The YMCA will provide receipts for maintenance costs. • Utilities: The YMCA will pay for electric, water, and gas utilities, as well as pool chemicals that supply the pool and gym. • Exhibit "C" lists current and expanded programs for YMCA programs as well as City access. • Indemnity: The defend and indemnity provisions are structured so that the YMCA will defend and indemnify the City for injuries, claims, damages, etc., that are a result of their improvements, operations or use at the pool or the gym, unless the injury, etc., is caused by the sole negligence or willful misconduct of the City. In addition, the City will defend and indemnify the YMCA for injuries, claims, damages, etc., that are a result of the City's improvement, operation, or use of the Park, but specifically excludes the pool and gym from the City's obligation. The City's indemnity is not required if the injury, etc., was caused by the YMCA's sole negligence or willful misconduct. • Insurance: The YMCA has provided proof of insurance, however, the YMCA will not agree to setting minimum thresholds of insurance requirements. The YMCA has indicated that it does not want to specify insurance dollar amount requirements so that should the Board change their insurance amounts, it would not affect the agreement. The City generally requires minimum insurance dollar requirements to adequately protect the City's interests in all of its agreements. • Termination: The term as currently written allows the YMCA to terminate the agreement after 12 months upon 90 days' notice and the City could terminate the agreement for cause (breach) after complying with the notice provisions contained in the default sections. The City generally requires a termination for convenience provision so that it can respond to changing needs or priorities. The YMCA has stated their reasoning is based on its investment into the premises under the agreement. • Right of First Refusal: The YMCA seeks the right of first refusal should the City seek to sell the park. Financial Impact Regardless of the state of the bond funding, there are still limited operating resources and a significant amount of deferred maintenance at the facilities. As written, the draft agreement would save the City approximately $479,426 per year. In addition, the City would be contributing a one-time payment of 4 $250,000 towards the estimated $600,000 deferred maintenance costs. If the City were to continue to sustain City recreation programs without this partnership with the YMCA, there would be a need for approximately $134,414 annually to fill the two frozen recreation supervisor positions and help manage the City's recreation programs. This would create a total offset of approximately $613,840 in FY 2013/2014. The additional annual costs to the City would be personnel costs of $134,414, and ongoing deferred maintenance costs. Whether the City decides to partner with the YMCA or not, there will be at least a $250,000 deferred maintenance cost. Without the partnership, the City would need to prioritize and address the additional $350,000 worth of deferred maintenance at the pool and the gym, which is currently being evaluated through the Capital Improvements Project (CIP) process. See the budget analysis below for more detail. Community Services Transition Plan Budget Analysis 2013 Utilities/Overhead Personnel (Rec-PT) Personnel (Rec-FT)` M & 0 (PW) M & 0 (Rec) Rec revenue Totals Recreation Division 134,414.00 134414 Camacho Rec $49,200 $88,273 $4,450 $6,041 $147,964 Las Palmas Pool $200,000 $127,962 $57,000 $8,000 ($61,500) $331462 $613,840 ime recreation super,nsor positions Summary Staff has arrived at agreement with the YMCA on most terms. There are, however, certain terms we bring to your attention which differ from what we generally include in agreements. Specifically, the following terms which are discussed above and included in the attached draft would benefit from City Council input: 1. Section 1.2 — the unilateral extension of a 5 year option exercisable only by the YMCA. This would provide the YMCA the Premises for up to 10 years. This provision is currently written to allow the unilateral extension. 2. Section 1.3 — the option to terminate for convenience can be exercised by the YMCA only, and the City can terminate for cause. 3. Section 9.4— the parties have competing language regarding insurance. The YMCA has included general language that does not set forth minimum dollar amounts for insurance requirements. The City has specified the minimum levels of coverage in effort to adequately address the potential risk and insulate the City from such risk. 4. Section 17.3 — the right of first refusal is a provision that we have not typically included in agreements related to the use of our facilities, but we do not foresee selling Las Palmas Park as a likely scenario. 5 Recommendation Staff seeks the City Council's approval of the primary deal points as discussed above and input on the four items referenced in the Summary if the City Council does not concur with the YMCA's language. As this agreement is in draft form, staff seeks Council's authorization to allow the City Manager to execute a maintenance and operation agreement in substantial conformance with the deal points above (and the attached draft agreement) and as revised by Council's input today. Accordingly, the resolution before you for approval references this authorization and the approval to partner with the YMCA to maintain and operate the municipal pool and Camacho gymnasium. 6