HomeMy WebLinkAbout2013-04-30; City Council; 21213; Authorize Staff Action Operate Alga Norte ParkCITY OF CARLSBAD - AGENDA BILL 25
AB#
IVITG.
DEPT.
21.213
04/30/2013
P&R
AUTHORIZE STAFF TO TAKE THE NECESSARY
ACTIONS TO OPERATE ALGA NORTE
COMMUNITY PARK AND AQUATIC CENTER
DEPT. HEAD
CITY ATTY.
CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution No. 2013-095 authorizing Parks & Recreation Department staff to take the
necessary actions to operate Alga Norte Community Park and Aquatic Center.
ITEM EXPLANATION:
The Alga Norte Community Park is located at the northwest corner of Poinsettia Lane and Alicante
Road. This park has an aquatic center, three baseball/softball fields, a dog park, a skatepark,
basketball courts, playgrounds, passive space, and parking. The aquatic center includes a competitive
pool, an instruction pool, and a therapeutic spa.
At the March 19, 2013 City Council Workshop staff presented information on several potential
partnership models for operating Alga Norte Community Park. Based upon a thorough analysis staff
recommended that the City should be the operator of Alga Norte Community Park. A copy of a
memorandum prepared for the workshop has been attached as Exhibit 2. At the workshop. City
Council directed staff to return at a future City Council Meeting for formal consideration and action
on the staff recommendation. Also attached as Exhibit 3 is a Financial Analysis and 5 Year Forecast of
revenues and expenditures based on the City's operational business model. Prior to the March 19
workshop, the City Clerk's office received almost 200 letters/emails/faxes regarding this topic.
At their meeting on April 15, 2013, the Parks & Recreation Commission unanimously recommended
to the City Council that the Parks & Recreation Department operational business model be selected
as the preferred operator of Alga Norte Community Park.
ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within
the meaning of CEQA in that it has no potential to cause either a direct physical change in the
environment, or a reasonably foreseeable indirect physical change in the environment, and therefore
does not require environmental review.
DEPARTMENT CONTACT: Chris Hazeltine, 760-434-2826, Chris.Hazeltine@Carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE •
UNKNOWN
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
Page 2
FISCAL IMPACT:
The City Departments responsible for maintaining and operating Alga Norte Community Park are
estimating that the year one annual operating expenses will be $1,564,000, and annual operating
revenues will be $1,395,000, resulting in a net general fund contribution of $169,000 in year one.
EXHIBITS:
1. Resolution No. 2013-095 approving operating model for Alga Norte Community Park.
2. Alga Norte Community Park and Aquatic Center Memorandum to the City Manager.
3. Alga Norte Community Park and Aquatic Center Financial Analysis and 5 Year Forecast.
EXHIBIT 1
1 RESOLUTION NO. 2013-095
^ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
3 CARLSBAD, CALIFORNIA, AUTHORIZING STAFF TO TAKE THE
NECESSARY ACTIONS TO OPERATE ALGA NORTE COMMUNITY
4 PARK AND AQUATIC CENTER
^ WHEREAS, Alga Norte Community Park Master Plan was approved via
Resolution No. 2002-371 on December 17, 2002; and
WHEREAS, on June 12, 2012, the Alga Norte Park Ground Breaking Ceremony
was held; and
WHEREAS, on April 15, 2013 the Parks & Recreation Commission unanimously
recommended that the Parks & Recreation Department be selected as the preferred
12 operator of Alga Norte Community Park;
13 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
14 Carlsbad, California, the following:
1^ 1. That the above recitations are true and correct.
2. That the City Council does hereby authorize Parks & Recreation
Department staff to take the necessary actions to operate Alga Norte Community Park
and Aquatic Center.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Carlsbad on the 30*'' day of April, 2013, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Packard, Wood, Blackburn and Douglas.
None.
ABSENT: None.
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MATT HALL, Maybr
ATTEST:
EXHIBIT 2
0P CITY OF
^CARLSBAD
www.carisbadca,gov
Memorandum
March 15, 2013
To: Mayor and CitvCouncil
From: City Manager
Re: ALGA NORTE COMMUNITY PARK OPERATIONS
Attached, please find a memo from Parks 8i Recreation Director Chris Hazeltine outlining the
process and analysis that led to the recommendation that the Parks 8i Recreation Department
operate Alga Norte Community Park. This information is provided as a means to brief you prior
to the topic being discussed at the March 19 City Council Workshop.
I have reviewed the memo and am in support of staff's recommendation. We look forward to
discussing the topic with you at next week's workshop.
Please let me know if you have any questions or would like additional information.
Attachments-Chris Hazeltine Memo, March 15, 2013
City Hall
1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 1 760-720-9461 fax
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^ CITY OF
^ CARLSBAD
Memorandum
March 15, 2013
To: John Coates, City Manager
From: Chris Hazeltine, Parks & Recreation Director
Via: Gary Barberio, Acting Assistant City Manager
Re: Alga Norte Community Park Operations
A thorough review df three proposals from potential operational partners and the City's
proposed operational business model for Alga Norte Community Park has been completed. The
assessment included extensive analysis by Parks 8i Recreation subject matter experts, a
thorough review by the City's Finance Department and an independent analysis by Baker Tilly.
Based on this thorough review of the three proposals and the City's business model, staff is
recommending that the City operate the park. The primary reasons for this recommendation
include the City's ability to provide a quality recreation experience that is both cost effective
and is accessible to all.
Background
At the April 25, 2011 City Council Workshop, Council considered altering the design of the park
to accommodate potential operational partnerships. At that meeting, staff was directed to take
the necessary actions to initiate the development of the park as It was designed, and to solicit
proposals from qualified parties to operate and maintain certain portions of the park.
In June 2012, three bids were received in response to the RFP that solicited potential
operational partners. For the purposes of the RFP, the park was divided into two areas. The
north portion includes the aquatic center and skate park, and the south portion includes the
athletic fields and dog park. The Carlsbad Boys & Girls Club submitted a proposal to operate
the entire park, Waterworks Aquatics submitted a proposal to operate the north portion of the
park and Sportsplex USA submitted a proposal to operate the south portion of the park.
In August 2012, the Parks & Recreation Department reviewed and scored the proposals based
on pre-established criteria. In October 2012, the Finance Department also reviewed the
proposals to validate projected level of usage and all revenue and expense estimates. Finance's
evaluation included personal interviews with all potential partners. Upon completion of this
extensive review, both departments concluded that the City is the preferred operator of the
park.
Parks & Recreation
799 Pine Ave., Suite 200 I Carlsbad, CA 92008 I 760-434-2825 I 760-434-5088 fax I www.carlsbadca.gQv
Operating Model Options for the Alga Norte Community Park
March 13, 2013
Page 2
In November 2012, Baker Tilly was hired to conduct an Impartial third-party evaluation of the
submitted proposals, including the City's (Parks & Recreation) operational business model and
Five-Year Forecast,
Baker Tilly was asked to:
1. Review and evaluate the submittals to determine if viable partners exist to meet the
City's goal to:
a. Eliminate or substantially minimize the City's contribution to the park
operations, maintenance and future capital improvement costs;
b. Provide a quality public amenity serving a diverse population that Is accessible to
all;
c. Offer services at a reasonable cost to users, particularly Carlsbad residents and
organizations.
The report evaluated the proposals from potential operators of the park based on
responsiveness of vendors, qualifications of vendors, qualitative review of proposal documents
and a risk assessment.
Baker Tilly Analysis Conclusions
• The Boys Girls Club's submittal was determined not to be a viable option for either
portion of the park.
• The city Is the preferred operator of the south portion of the park.
o The Sportsplex USA final proposal would require an additional $2.5 million in
additional capital outlay as they have stated their proposal will not work without
significant changes to the park's design. The analysis shows a 25 year payback
for the City to recoup this additional Investment.
• The city is the preferred operator of the north portion of the park.
o The Waterworks Aquatics proposal Is based on their exclusive ability to operate
the facility, Including setting price points, and establishing their own user group
priority schedule.
• Should the city negotiate certain price points and/or require priority
usage for existing local groups (CUSD, North Coast Aquatics}, the
Waterworks Aquatics business plan would be impacted,
o The Waterworks Aquatics model may offer the best opportunity to reduce the
city's financial contribution to the operation of the north portion, but It limits
accessibility to all potential users and does so at a higher participation cost.
• Their proposal identifies a $3,000 monthly payment to the City.
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Operating Model Options for the Alga Norte Community Park
March 13, 2013
Page 3
o The city's model creates a better opportunity to serve a diverse group at a
reasonable cost.
o The city's operating deficit Is modest and can be further modified to reduce
expenditures.
Other considerations that make the City the preferred operator as identified In the Baker Tilly
evaluation Include:
o Selecting from only one qualified vendor would not be recommended.
o Any operator of the north portion of the park would be responsible for the
management of the skate park; Waterworks Aquatics has no experience
operating and/or maintaining skate parks.
Summary u ,
Staff thoroughly reviewed the Baker Tilly report and concurs with Its conclusion that the City is
the best value operator of the park. Based on the findings In their report, as well as the analysis
conducted and the conclusions reached by both the Parks 8i Recreation and Finance
Departments, Parks & Recreation Department staff recommends that the City Council direct
staff to take the necessary actions to prepare to operate Alga Norte Community Park. After
many years of planning, the community will have access to this recreational amenity soon after
construction Is completed later this year.
Alga Norte Community Park and Aquatic Center Financial Evaluation
EXHIBIT 3
5 Year Forecast Model - North Portion of the Park
City of Carlsbad
Year Revenue
5 Year Forecast
Expenditures Net Revenue
%Cost
Recovery
Waterworks Aquatics
Year Revenue
5 Year Forecast
Expenditures* Net Revenue
1 $ 1,267,205 $ 1,410,578 $ (143,373) 89.8% 1 $ 947,749 $ 967,022 $ (19,273)
2 $ 1,478,135 $ 1,484,115 $ (5,980) 99.6% 2 $ 1,075,524 $ 1,061,558 $ 13,966
3 $ 1,507,050 $ 1,511,248 $ (4,198) 99.7% 3 $1,209,990 $ 1,115,469 $ 94,521
4 $ 1,536,951 $ 1,541,329 $ (4,378) 99.7% 4 $ 1,275,202 $ 1,172,357 $ 102,845
5 $ 1,567,450 $ 1.572,011 $ (4,561) 99.7% 5 $ 1,324,202 $ 1,215,922 $ 108,280
* Includes a fixed lease payment of $36,000 to ttie city eacn year.
5 Year Forecast Model - South Portion of the Park
City of Carlsbad 5 Year Forecast Sportsplex USA 5 Year Forecast
Year Revenue Expenditures Net Revenue
Cost
Recovery Year Revenue Expenditures Net Revenue
1 $128,199 $153,340 $(25,151) 83.6% 1 $701,913 $782,363 $(80,450)
2 , $153,050 $159,987 $(6,937 95.7% 2 $833,940 $844,774 $(10,834)
3 $156,414 $163,552 $(7,138) 95.6% 3 $939,535 $897,346 $42,189
4 $159,857 $167,207 $(7,351) 95.6% 4 $1,077,683* $954,843 $122,840
5 $163,382 $170,963 (7,581) 95.6% 5 $1,178,993* $1,014,303 $164,690
Includes a 5% annual lease paid to the city. $54,000 in year 4 and $59,000 in year 5.
5 Year Forecast Model-Alga Norte Community Park & Aquatic Center
City of Carlsbad
Year Revenue
5 Year Forecast
Expenditures Net Revenue
%Cost
Recovery
1 $1,395,404 $1,563,918 $(168,514) 89.2%
2 $1,631,185 $1,644,102 $(12,917) 99.2%
3 $1,663,464 $1,674,800 $(11,336) 99.3%
4 $1,696,808 $1,708,536 $(11,728) 99.3%
5 $1,730,832 $1,742,974 $(12,142) 99.3%
Alga Norte Community Park
Operations
Chris Hazeltine
Parks & Recreation Director
April 30, 2013
Alga Norte Community Park
Virtual Tour
City Council Direction
March 19, 2013 City Council Workshop
–Discussed operational models
–Directed staff to return for formal consideration
and action
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5 Year Forecast
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Parks & Recreation Department
Business Models
•FY 2010/11 model required a $1.26 million
annual contribution
•FY 2013/14 model requires $170,000
contribution in year one (89% cost recovery)
•In year two achieve 99% cost recovery
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Parks & Recreation Department
New Business Model
Identified efficiencies
–Reduced 9.5 FTE
Increased innovative programing
–Emphasize high revenue generating programs
–Raised cost recovery goal to 100%
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The city is the preferred
operator of the park.
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Baker Tilly Findings
Alga Norte Community Park
Parks & Recreation Commission
April 15, 2013 Meeting
Parks & Recreation Commission unanimously
recommended that the City Council direct staff
to operate Alga Norte Community Park.
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Alga Norte Community Park
Staff Recommendation
•Direct staff to take the necessary actions to
operate Alga Norte Community Park
•Adopt Resolution 2013-095
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Alga Norte Community Park
Operations
Chris Hazeltine
Parks & Recreation Director
March 19, 2013
Alga Norte
Community
Park
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Background
•Dec. 17, 2002, City Council approved the master plan
•Aquatic Center
•Multipurpose Fields
•Dog Park & Skate Park
•Basketball Courts
•Playground & Picnic Areas
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City Council Direction
April 26, 2011 - “Take all necessary actions to develop
phase I and solicit proposals from qualified parties to
operate and maintain the park.”
–Code compliance update
–Consider accommodating future partners
–RFP development
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Ground Breaking Ceremony
June 12, 2012
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Operations Request for Proposal
Viable partners to meet the city’s goal to:
•Eliminate or substantially minimize the
city’s contribution to funding;
•Provide a public amenity serving a diverse
population accessible to all;
•Offer services at a reasonable cost to users,
particularly Carlsbad residents and
organizations.
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Alga Norte
Community
Park
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RFP Bids Received
•Boys & Girls Club of Carlsbad
•Sportsplex USA
•Waterworks Aquatics, LLC
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RFP Evaluation
•Three-tiered evaluation
–Parks & Recreation Review Team
–Finance Department
–Baker Tilly
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Baker Tilly Assessment
Analysis for the operations of the park in relationship
to the three goals for the project:
–Financial (5 year forecast)
–Quality amenity serving diverse population
accessible to all
–Services at a reasonable cost
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5 Year Forecast North Portion
North Portion - Aquatic Center & Skate Park : City of Carlsbad
Year 1 Year 2 Year 3 Year 4 Year 5
M&O $ 1,410,578 $ 1,484,115 $ 1,511,248 $ 1,541,329 $ 1,572,011
Revenue $ 1,267,205 $ 1,478,135 $ 1,507,050 $ 1,536,951 $ 1,567,450
Net Income (Loss) $ (143,373) $ (5,980) $ (4,198) $ (4,378) $ (4,561)
Cost Recovery 89.8% 99.6% 99.7% 99.7% 99.7%
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North Portion - Aquatic Center & Skate Park : Waterworks Aquatics
Year 1 Year 2 Year 3 Year 4 Year 5
M&O $ 967,022* $ 1,061,558* $ 1,115,469* $ 1,172,357* $ 1,215,922*
Revenue $947,749 $ 1,075,524 $ 1,209,990 $ 1,275,202 $ 1,324,202
Net Income (Loss) $ (19,273) $ 13,966 $ 94,521 $ 102,845 $ 108,280
* Includes a $36,000 annual lease payment to city.
5 Year Forecast South Portion
South Portion – Athletic Fields & Dog Park : City of Carlsbad
Year 1 Year 2 Year 3 Year 4 Year 5
M&O $ 153,340 $ 159,987 $ 163,552 $ 167,207 $ 170,963
Revenue $ 128,199 $153,050 $ 156,414 $ 159,857 $ 163,382
Net Income (Loss) $ (25,141) $ (6,937) $ (7,138) $ (7,351) $ (7,581)
Cost Recovery 83.6% 95.7% 95.6% 95.6% 95.6%
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South Portion – Athletic Fields & Dog Park : Sportsplex USA with $2.5
Million Construction Modifications
Year 1 Year 2 Year 3 Year 4 Year 5
M&O $ 782,363 $ 844,774 $ 897,346 $ 954,843 $ 1,014,303
Revenue $ 701,913 $833,940 $ 939,535 $ 1,077,683* $ 1,178,993*
Net Income (Loss) $ (80,450) $ (10,834) $ 42,189 $ 122,840 $ 164,690
* 5% of gross revenue paid to the city.
5 Year Forecast
North & South Portion – Combined : City of Carlsbad
Year 1 Year 2 Year 3 Year 4 Year 5
M&O $ 1,563,918 $ 1,644,102 $ 1,674,800 $ 1,708,536 $ 1,742,974
Revenue $1,395,404 $1,631,185 $ 1,663,464 $ 1,696,808 $ 1,730,832
Net Income (Loss) $ (168,514) $ (12,917) $ (11,336) $ (11,728) $ (12,142)
Cost Recovery 89.2% 99.2% 99.3% 99.3% 99.3%
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Baker Tilly Findings
South: Multipurpose athletic fields & dog park
City of Carlsbad Parks & Recreation
City’s operating model is the preferred operator based on its ability to meet the three stated goals.
Sportsplex USA
Operating model did not meet the three stated goals.
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North: Aquatic center & skate park
City of Carlsbad Parks & Recreation
City’s operating model creates a better opportunity to provide a quality amenity for a diverse group at a reasonable cost. With effective planning and management, could reduce operation costs.
Waterworks Aquatics LLC
Best opportunity to reduce the financial contribution but does so using a model that limits accessibility to the broadest array of groups and potentially impacts reasonableness of participant cost.
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Baker Tilly Findings
Alga Norte Community Park
Recommendation
City Council direct staff to take the necessary
actions to operate Alga Norte Community Park.
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