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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. // // // 7 8 9 10 11 16 17 18 19 20 21 22 23 // 24 // 25 // 26 27 28 // 3 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. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 6 ^ 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. r 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 3 5 Year Forecast 4 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 5 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% 6 The city is the preferred operator of the park. 7 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. 8 Alga Norte Community Park Staff Recommendation •Direct staff to take the necessary actions to operate Alga Norte Community Park •Adopt Resolution 2013-095 9 Alga Norte Community Park Operations Chris Hazeltine Parks & Recreation Director March 19, 2013 Alga Norte Community Park 2 Background •Dec. 17, 2002, City Council approved the master plan •Aquatic Center •Multipurpose Fields •Dog Park & Skate Park •Basketball Courts •Playground & Picnic Areas 3 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 4 Ground Breaking Ceremony June 12, 2012 5 6 7 8 9 10 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. 11 Alga Norte Community Park 12 RFP Bids Received •Boys & Girls Club of Carlsbad •Sportsplex USA •Waterworks Aquatics, LLC 13 RFP Evaluation •Three-tiered evaluation –Parks & Recreation Review Team –Finance Department –Baker Tilly 14 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 15 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% 16 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% 17 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% 18 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. 19 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. 20 Baker Tilly Findings Alga Norte Community Park Recommendation City Council direct staff to take the necessary actions to operate Alga Norte Community Park. 21