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Councilmember Chu stated he will recuse himself from this item as he is a member of the Board of Managers for the Northwest YMCA, which is one of the bidders.
Councilmember Chu left the dais.
Recreation Supervisor John Lawrence presented the staff report. Supervisor Lawrence stated Holly Lofgren identified an error on page 13 of the staff report (section D-3rd bullet). The figures shown should reflect the number of participants not participant hours as listed.
Councilmember Swegles inquired if lap swimming exists at any other pools in the City and Supervisor Lawrence stated the City transferred all adult lap swimming to the Fremont High School Pool once it opened.
Councilmember Swegles inquired as to the cost to the City for the lap swimming. Supervisor Lawrence stated he did not have the exact figure, but he is aware that the cost is quite high as the other pools do not have the type of attendance that the Fremont High School Pool receives.
Councilmember Swegles directed staff to obtain the cost to the City for lap swimming prior to the Fremont High School Pool opening.
Councilmember Swegles confirmed with Supervisor Lawrence that the City collects a flat fee (as it is a simpler fee to calculate); however, the City accepted proposals which offered percentages and flat fees.
Councilmember Swegles inquired as to why safety training was not included in the mix of services. Supervisor Lawrence stated that omission was an oversight and that the City does offer safety training classes.
Councilmember Swegles asked staff if the estimated negative net impact (as listed on page 23 of the staff report) took into account the potential income. Supervisor Lawrence stated the estimated negative figures would be the net amount after the revenue was subtracted.
Councilmember Hamilton inquired as to what the California Sports Center (CSC) currently pays to the City. Supervisor Lawrence stated CSC’s existing contract requires payment of $48,000 plus an end-of-summer payment of $4,000.
Councilmember Hamilton inquired if the pool receives a subsidy from the City and Superintendent of Recreation Nancy Bolgard Steward stated the City does subsidize the pool at a range between $10,000 and $38,000 annually.
Councilmember Hamilton inquired about the City’s arrangements with other school districts and how the City works with them to provide services. Supervisor Lawrence stated the City has arrangements with the Sunnyvale Elementary School District (Columbia and Sunnyvale Middle Schools) and the Santa Clara Unified District (Peterson Middle School). At Columbia and Sunnyvale, the district offers physical education classes and the City has use of the pools during the other times for recreational swim and classes. At Peterson Middle School, the City rents the pool during the summer for swim lessons and recreational swim time.
Superintendent Steward stated she wished to clarify that the chart on page 23 of the staff report identifies that if the City were to run the program (versus CSC or another vendor); the City would incur a bottom-line negative impact of $155,384. Additionally, these figures do not account for the subsidy the City gives to the pool. Whereas, if the City were to select one of the bidders, the City would receive a net revenue return of approximately $48,000. However, this revenue return also does not take into account the subsidy that the City gives to the pool.
Councilmember Swegles inquired as to why the City would generate only $250,000 versus CSC who anticipates revenue of $438,000. City Manager Amy Chan stated that it is her belief that over time CSC has been able to build a strong membership and have competitive swimming; whereas the City would initially offer more recreational swimming and it would take time to build up a competitive program and attract the critical mass of competitive swimmers. She stated that other bidders (although they have been in the swim business for a long time) also are not as competitive as CSC. The City would have to build a reputation and develop the program which would take time.
Councilmember Swegles stated he could not think of a better way to start a business than to take over a business that has a base of $438,000. City Manager Chan stated that clientele usually can be bought with the business, but in this situation, the City may not get the same clientele that CSC already has. CSC may choose to take their clients with them to another swim center.
Vice Mayor Spitaleri inquired as to how the fees are reviewed. Superintendent Steward stated each year the operator brings proposed fees to staff for review. City Manager Chan stated Council may provide direction to staff, but currently the Director of Parks and Recreation reviews the fees.
Public hearing opened 7:47 p.m.
Dick Oliver, Parks and Recreation Commission member, presented the recommendations of the commission. The commission agrees with the staff recommendation to negotiate an agreement with the CSC for operation of the Fremont High School Pool.
Lisa Fischer-Colbrie spoke in favor of guaranteed usage of Fremont High School Pool at current lane levels and limited cost increases. She spoke of the benefits of Sunnyvale Swim Club (SUNN) to the residents of the community. She asked that Council recognize SUNN’s critical access need to the pool and their need for additional lanes.
Councilmember Howe inquired what SUNN’s dues are and Ms. Fischer-Colbrie stated they are based on a sliding scale. The range is from $145 to $85 per month based on an annual basis.
Councilmember Moylan inquired what was actually being asked of the City by SUNN and Ms. Fischer-Colbrie stated they would want either guaranteed lane usage with limited and reasonable rate increases or they would like financial assistance from an outside grant or the City to keep their member rates low.
Councilmember Moylan confirmed with Ms. Fischer-Colbrie that SUNN is not allowed to offer swim lessons as part of their rental agreement with CSC.
Councilmember Howe inquired if SUNN could offer swim lessons at another pool in the City and Superintendent Steward stated the City would not rent out a pool where the City recreational swim classes are being offered. Councilmember Howe confirmed with Superintendent Steward that she is not aware of any pools in Sunnyvale where the City does not offer classes.
Holly Lofgren explained the goals that the Friends of the Fremont High School Pool group brought to Council five years ago. Councilmember Moylan stated that staff identified that all items are negotiable and he asked Ms. Lofgren to elaborate on her concerns. A discussion ensued regarding her concerns. Ms. Lofgren stated there are guaranteed hours for lap swimming and she would like to have guarantees that the other four swimming groups (master swimming, swim team, lessons, and open recreational swimming) will not be eliminated. These guarantees should be in writing in the contract. Ms. Lofgren stated the staff report does not give preference to Sunnyvale groups for rentals and she would like this corrected in the contract.
Councilmember Moylan inquired about Ms. Lofgren’s statement about the three P’s (programming, pricing and parking). Ms. Lofgren stated that, regarding programming, she would like to see open swimming sessions on Sunday’s during the day (not later than 6 p.m. in the evening). She identified that no improvements in the size of the master swim program have occurred. Regarding pricing, Ms. Lofgren stated she has concerns over the contractor moving the fees into a monthly pricing structure. She has concerns over the rates and that there are not any comparative rates provided in the staff report to compare what is reasonable. Ms. Lofgren stated concerns over parking at the pool.
Councilmember Moylan asked if Ms. Lofgren had something she wanted to say about maintenance. Ms. Lofgren stated she encourages the contractor to increase the maintenance and cleaning levels. She stated the drains often are stopped up; mold issues exist; the tile needs attention to detail; and broken fixtures have not been replaced.
Councilmember Moylan announced that the Fremont High School Pool was Ms. Lofgren’s idea. He confirmed that citizens may still donate to the Fremont High School Pool fund. She cautioned that the City not borrow from the pool fund to pay for another operating expense. Councilmember Moylan asked if she was suggesting that had been done and she stated it has not, but that she wanted Council to be aware that is not to be done.
Councilmember Moylan confirmed with Ms. Lofgren that in summary she feels the current operator (CSC) has met the requirements of the request for proposal (RFP), but she would like CSC to address the areas of concern that she has identified and is requesting that the City’s RFP include a few more rules and controls.
Councilmember Moylan asked if Ms. Lofgren had the opportunity to choose between the current contractor and the City as operators of the pool, who would she choose. Ms. Lofgren stated she could not answer that unless she was in charge of a large group that she could poll.
Kathleen Meadows, co-founder of the Fremont High School Pool, stated her support for CSC and the variety of programs they have offered to the community. Ms. Meadows stated they do need to improve in a few areas such as maintenance. She also stated concerns over the master’s program and would like to see the fees reduced.
Bud Warashina stated his concern over the maintenance at the Fremont High School Pool and also feels the rates are too high.
Irene Smith is a customer of Fremont High School Pool and stated her concerns over any increase in rates.
Kim Clarno stated her family moved to Sunnyvale for the great youth sports programs and she thanked Council for their support of the Sunnyvale Swim Club.
Elaine Schultz stated her support of CSC operating the Fremont High School Pool and stated she likes knowing that the staff is well trained. Ms. Schultz stated her children have previously taken City recreation classes in the past and noted that the leader was not trained specifically in what they were teaching.
Eric Messner stated his support of the SUNN program and added that in order for the club to remain competitive they need to retain the 50-meter pool space.
Steve O’Neill stated he is an active master swimmer and is in support of CSC operating the Fremont High School Pool. Mr. O’Neill stated he believes the master’s program has not increased due to a number of competitive programs in the area along with the price structure for out of the City participants is not competitive with the other teams.
Councilmember Swegles inquired as to how many members are currently in the master’s program and Mr. O’Neill stated there is a range of 10 to 25 swimming at lunchtime.
Ricky Silva, co-manager of Fremont High School Pool, stated in comparison to surrounding programs, CSC offers a wide variety of programming.
David Peterson, Owner and Director of CSC, stated he wished to make clear that he is hired by the City and that his contract is negotiable. Mr. Peterson stated the current proposal’s guaranteed income is based on the starting monthly income from the fifth year and to evaluate this properly, the first five years of the new agreement should be compared with the first five years of the ending agreement.
Mr. Peterson stated CSC does not offer competitive swimming and that all users would like more time, not just SUNN. In reference to Ms. Lofgren’s concerns over the five uses of the pool, those will not change and it would be fine to have those added to the contract. Mr. Peterson stated the maintenance problems are as much of a building design problem as they are related to ongoing maintenance. There are not any floor drains in either locker except in the showers and directly under the toilets which causes standing water to pool on the floors. Mr. Peterson stated he will address the maintenance concerns to the best of his ability and take responsibility for outstanding items.
Councilmember Moylan inquired if Mr. Peterson would be open to guaranteed lane swimming for the SUNN swim team; master’s program, and the public. Mr. Peterson stated they would be open to negotiations as long as it did not limit them to the opportunities that they need to have to operate the pool.
Councilmember Moylan informed Mr. Peterson that the City has a new sub-element that states all City fees shall be competitive with other cities. Councilmember Moylan asked Mr. Peterson if he would be able to structure his fees under this criterion. Mr. Peterson stated he would have to research this issue further.
Mr. Peterson stated the belief that rental groups are taking over the Sunday open swim during the summer is not correct. He stated the reason for the elimination of Sunday open swim was because five to ten customers would show up with five lifeguards on the deck. This was a huge loss in revenue.
Councilmember Moylan stated in the first year, there was shared space with a rental group taking up part of the space and the remainder was available for open swim which seemed to work quite well. Mr. Peterson stated the problem is that five lifeguards are still required for that purpose which is costly.
Councilmember Swegles confirmed with Mr. Peterson that his proposal includes a flat rate which is the same for residents and non-residents.
Councilmember Swegles inquired if it would be possible to offer a flat rental rate for a resident group as opposed to a non-resident group. Mr. Peterson stated a reduced rental fee for residents would require the leadership of that organization be Sunnyvale residents; however, he has concerns on placing these types of restrictions on his ability to operate as a company. They are a for-profit company and need to make a profit in order to operate.
Councilmember Swegles stated he is offering that Mr. Peterson increase the rates for the non-residents and off-set that by lower fees for residents. Mr. Peterson stated the challenge would be in identifying the percentage of residency for a group or club that would receive a group resident rate. Mr. Peterson stated his preference is to work with residents of Sunnyvale.
Councilmember Howe asked Mr. Peterson to explain what happens on the weekend at the pool. Mr. Peterson stated under the terms of the current agreement, lap swim is available from 8 a.m. to 11 a.m., with CSC offering lessons from 9 a.m. to 1 p.m., and group uses after that time up to 7 p.m. on the weekend. This schedule can vary in what CSC determines as allowable uses. He stated they are going to try staying open until 7:30 p.m. this summer.
Councilmember Howe asked how many visits are required to make the monthly card more advantageous than the 12-punch card and Mr. Peterson stated the 12-punch pass is the same as the monthly fee, but the twelve visits may be used over an entire year. The monthly fee and punch pass are based on swimming more than three times a week and become advantageous at that point. They did offer a six and twelve month pass which offered further savings but were required to stop selling those pending the outcome of Council action on the operation of the pool.
Public hearing closed 8:58 p.m.
Councilmember Hamilton inquired if any of the pools mentioned in the price comparison chart in the staff report are operated by private contractors and Supervisor Lawrence stated he was not aware of any that are operated by outside contractors.
Mayor Spitaleri inquired if once the contract is negotiated will it come back to Council for final approval. City Manager Chan stated normally a contract would not come back for final approval but Council could direct staff that the contract comes back to Council for final review and approval.
Councilmember Swegles inquired if staff is comfortable with instituting resident and non-resident fees or would they prefer to defer to the contractor.
Superintendent Steward stated if Council directs staff to negotiate that issue with the contractor they will do so. There is a lot that goes into how to price for residents versus non-residents. Councilmember Swegles stated he assumed that would be done by a certain percentage of swimmers that are Sunnyvale residents. Superintendent Steward stated that she believed that was what Mr. Peterson was alluding to, and staff would want to establish that percentage.
MOTION: Councilmember Moylan moved and Councilmember Swegles seconded to approve Alternative No. 4: direct staff to negotiate a proposed agreement as specified by Council with the current contractor, California Sports Center for operation of the Fremont High School Swimming Pool
with the following additions to the contract:
· a flexible time period for operation by the contractor (subject to negotiations)
· guaranteed minimum hours for lap swim
· guaranteed minimum amount of lessons
· guaranteed minimum hours for master swimming
· guaranteed minimum hours for the SUNN Swim Team
· guaranteed minimum hours for open swim which will include 12 p.m. to 6 p.m. on Saturdays and Sundays for summer months
· Fees are to be set to staff’s satisfaction so no one group is losing out to another city due to lack of competitiveness
· Maintenance and housekeeping must receive a very good rating from participants and repairs are to be completed within six months
· Priority be given whenever possible to Sunnyvale-based groups
Councilmember Moylan stated none of these have to be exclusive; they just have to involve access to the pool.
Councilmember Moylan included that if this is not workable for the contractor, the direction is for City staff to take over operation of the pool.
Councilmember Swegles offered a friendly amendment to add a contract period of five years and remove the flexible time period for operation.
Friendly amendment accepted.
Councilmember Hamilton stated she will not be able to support this motion unless the general fund subsidies were to be reduced. She stated the only way she would support this motion would be if the sections regarding City staff taking over operation of the pool (should the contractor not be able to adhere to the conditions), and the time restrictions on group use were removed. She stated the way to deal with the issue through a priority preference for Sunnyvale based groups.
Councilmember Hamilton offered a friendly amendment to remove the City taking over operation of the pool.
Friendly amendment accepted.
Councilmember Hamilton offered a friendly amendment to remove restrictions on group use with priority to be given to Sunnyvale-based groups with percentage to be determined by staff and then return to Council in final report for approval.
Friendly amendment accepted.
Councilmember Hamilton stated she would prefer an eight year contract. Councilmember Moylan offered that they change the contract to state a term of five to eight years. Councilmember Swegles and Hamilton agreed.
Friendly amendment accepted.
Councilmember Hamilton offered a friendly amendment that the contractor does not go to a monthly fee structure; rather they maintain their present system of drop-in, punch card, and monthly swim card.
Friendly amendment accepted.
Councilmember Swegles offered a friendly amendment to review suggestions that the previous Parks and Recreation Commission developed to assist with subsidizing the swim programs.
Friendly amendment accepted.
Councilmember Howe asked Councilmember Moylan if the direction of his motion was to continue the subsidy similar to the current amount, or did he anticipate it would increase. Councilmember Moylan stated that is a negotiating point and it is his hope that the subsidy would be similar to what it is now.
Councilmember Howe asked staff how long they believe it will take to return to Council with what they were able to do and under what terms. Superintendent Steward stated it would take approximately four to six weeks.
City Manager Chan offered that Council may want to consider offering an extension to the contract to allow time for negotiations to occur.
Councilmember Howe offered a friendly amendment to allow for an extension of up to six months (at discretion of the City Manager) of the existing agreement to allow adequate time for negotiations.
Friendly amendment accepted.
Councilmember Hamilton offered a friendly amendment that one of the options that staff explores with the contractor is capping the subsidy at a mutually agreed upon number (to be less than $48,000) or a look at changing what is paid to the City by paying a percentage rather than a flat fee. Councilmember Moylan stated this is not something to be done with the contractor or to be a part of this motion. It is a separate issue from who Council chooses to be the contractor and what should be negotiated in the contract. Councilmember Moylan stated he proposed a study issue on this last year and it was not ranked high enough to study.
Councilmember Hamilton stated she is suggesting that staff negotiate an agreement with the contractor which states the General Fund subsidy will have a limit. Councilmember Moylan stated that was a variable that should not be in this equation.
Friendly amendment not accepted.
City Manager Chan stated she understood Councilmember Hamilton’s amendment which was to cap the City expense for this contract as a negotiating point. Doing so would dictate how much revenue the contractor gives the City and Council may provide direction for the subsidy margin of this contract. Vice Mayor Spitaleri stated the friendly amendment was not accepted so this will not go forward.
Councilmember Moylan stated that staff has been directed to optimize the payment from the contractor to the City during negotiations which will minimize subsidies from the General Fund.
Director of Parks and Recreation David Lewis cautioned against instituting open swim from
1 p.m. to 6 p.m. on Sundays as it will be a financial issue for the contractor and could cause the subsidy to increase. Director Lewis stated there are other pools open on Sunday in the community.
Councilmember Moylan stated staff may return to Council with two alternatives regarding Sunday open swim.
Councilmember Hamilton stated the original motion definitely included open swim from 1 p.m. to 6 p.m. on Sundays and she wished to clarify if an amendment has now been made changing that condition. Councilmember Moylan stated that the conditions in his motion are negotiating points and if one area is problematic, staff may return with alternatives in addition to the original condition and he will amend his motion accordingly.
Councilmember Hamilton asked Councilmember Moylan to restate his motion.
Councilmember Moylan asked Councilmember Hamilton if she wished to have a certain fraction of the local swim team group to be Sunnyvale residents and Councilmember Hamilton stated she will leave that up to staff. Councilmember Moylan stated he will identify it as a number greater than 50 percent Sunnyvale Swim Team membership.
Restated Motion: MOTION: Councilmember Moylan moved and Councilmember Swegles seconded to approve Alternative No. 4: direct staff to negotiate a proposed agreement as specified by Council with the current contractor, California Sports Center for operation of the Fremont High School Swimming Pool:
with the following additions to the contract:
· Guaranteed minimum hours for lap swim as currently contained in the contract;
· Guaranteed minimum hours for lessons;
· Guaranteed minimum hours for master swim;
· Guaranteed minimum hours for local swim team (for a percent to be determined by staff but must be greater than 50 percent Sunnyvale residents);
· Guaranteed minimum hours for open swim and those hours to include afternoons on Saturdays and Sundays for summer months;
· If any of the negotiation points have a large financial difference, staff can come back with two alternatives;
· Contract terms to be 5 – 8 years (as negotiated by staff);
· Sunnyvale-based groups to be given priority over all other groups;
· Maintenance and housekeeping must receive a very good rating from participants and repairs are to be completed within six months;
· All fees are to be set so that in staff’s opinion the City will not lose members to other cities because the fees are too high;
· Maintain present punch card/monthly card rate structure and not establish a membership structure;
· Extension of up to six months (at discretion of the City Manager) of the existing agreement to allow adequate time for negotiations;
· Explore the feasibility of a percentage increase in rates for non-residents to be off-set by lower fees for residents;
· Review proposals that the previous Parks and Recreation Commission developed to subsidize the swim programs; and
· Contract to come back to Council for approval.
VOTE: 5-0 (Councilmember Chu recused and Mayor Lee absent)
MOTION: Councilmember Howe moved and Councilmember Moylan seconded to direct staff to determine costs associated with the City renting the Fremont High School Pool from the present contractor for Sundays from Noon to 5 p.m. for the months of July and August of 2007 and bring that information forward to Council.
VOTE: 5-0 (Councilmember Chu recused and Mayor Lee absent)
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