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HomeMy WebLinkAbout2009/04/28 Item 10 CITY COUNCIL AGENDA STATEMENT ~ \ 'f:. CITY OF .....~ (HULA VISTA ITEM TITLE: SUBMITTED BY: REVIEWED BY: April 28, 2009 Item 10 RESOLUTION OF THE CITY COuNCIL OF THE CITY OF CHULA VISTA AUTHORIZING STAFF TO PURSUE A PUBLIC-PRIVATE PARTNERSHIP AND OPERATING AGREEMENT .WITH THE FRIENDS OF THE CHULA VISTA NATURE CENTER FOR OPERATION AND MANAGEMENT OF THE NATURE CENTER, AND APPROVING TWO CONCEPTUAL FUNDING 'PLAi'TS AS A BASIS OF INITIAL NEGOTIA nONS WITH THE FRIENDS OF THE CHULA VISTA NATURE CENTER .M DIRECTOR OF RE1eTION AND NATURE CENT~ CITY MANAGER ASSISTANT CITY NAGER s--r- DEPUTY CITY MAt"'TAGER ~;- ~ r ~ 4/STHS VOTE: YES 0 NO D SUMMARY At the City Council meeting on April 7, 2009, Committee Chairs from the Mayor's Task Force for Creating a Sustainable Chula Vista Nature Center did an oral presentation outlining and summarizing the work of the Task Force to date. Their preliminary recommendations were both detailed and numerous, the result of six separate committees focusing on separate and distinct issues. This report presents staff recommendations on how the City should proceed in efforts to preserve the Nature Center, both as a valuable asset of the City, as well as from an operational/management point of view. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activitY, acceptance of a report detailing how the City should proceed in efforts to preserve the Nature Center, is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060( c )(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary RECOMMENDATION City Council approve the Resolution 10-1 APRIL 28, 2009, Item~ Page 2 of 5 BOARDS/COMMISSION RECOMMENDATION Not applicable. BACKGROUND The Mayor's Task Force for Creating a SustainableChula Vista Nature Center presented . their preliminary report to City Council on April 7, 2009. The report outlined the work of six Task Force Committees, and presented a number of preliminary recommendations. City Council accepted the report, and directed staff to return to Council with staff s recommendations on how the City should proceed. DISCUSSION The preliminary report of the Mayor's Task Force on Creating a Sustainable Chula Vista Nature Center contained a number of preliminary recommendations covering a wide variety of topics. Many of these recommendations were specific to methods of marketing, fundraising, and development, along with potential fmancial restructuring and changes in operational and management oversight. The Task Force recommendations all addressed the goal of identifying methods to make the Nature Center fmancially sustainable over the long run. Pivotal to the vast majority of the recommendations made were two key elements which would have significant impact on the progress and methods of implementing other suggestions. The Task Force is recommending that: . a public-private partnership between the City of Chula Vista and a SOICc) 3 non- profit entity be established . management and operational oversight of the Nature Center transition to the non- profit entity, through a negotiated operating agreement. A public private partnership, along with a negotiated operating agreement that would shift day-to-day operations to a non-profit has a number of benefits, many of which were identified in the Task Force report: . The City would maintain the Nature Center as a valuable City asset, and could also continue to be involved in management decisions through designated representation on the Board of Directors of the non-profit, similar to its designation of members on Boards and Commissions . Potential for increased opportunities for fundrmsing due to non-profit management and operations . Potential for reduced operating costs as changes in staffmg occur (public to private) . Renewed outreach and marketing efforts by a non-profit operator The details of a partnership and operating agreement between the City and a non-profit would need to address a broad scope of concerns, which would include the City's ongoing role and authority in operations and management, the City's interest in maintaining the facility as an asset, compliance with existing legal contracts and agreements, continued public access to the facility, performance standards, and financial support from the City. This is not uncharted territory, and the Task Force reviewed various successful agreements and partnerships between municipalities and non-profits for the operation of zoos and aquariums as a basis for their recommendations. Staff has also reviewed several existing agreements, and concurs with the Task Force that successful partnerships do exist, and that this is a viable option for the City to pursue. 10-2 APRIL 28, 2009, Item~ Page 3 of 5 An operating agreement would need to contain very specific information, commitments and expectations resulting from negotiation. Some examples of potential broad and encompassing language follow: The City of Chula Vista would: . continue to lease the land upon which the Nature Center is located, and would continue to comply with licenses and agreements with local, regional, state and federal agencies and authorities . manage, oversee, and fund the ongoing routine maintenance of the facilities that compose the Chula Vista Nature Center, including the access road . provide funding for specified utility services . continue to make annual debt service payment of $164,000 . receive an annual report of operations, audited financial statements and the status of fundraising efforts.. . retain authority to terminate the arrangement for any major breach of the agreement, including failure to meet specified performance standards . designate/appoint at least one (or 10%, whichever was higher) of the membership of the Board of Directors, in a practice similar to its designation of members of Boards and Commissions The non-profit would: . take over the day-to-day operations, programming, and management of the ~~. . . .. be given the flexibility to implement and administer programs best suited over time to providing broad access, and generating revenue . be considered illdependent and self-perpetuating ... have authority over matters relating to the use of the physical plant with the exception of not interfering with the City's right to maintain/improve its asset .. establish and collect admission and membership fees .. provide a broad range of programs, services, and activities . actively market and promote the facility and programs . collect future fees from parking areas and/or shuttle bus .. determine the redefinition of the organizational structure of operations .. determine the review and development of protocols and programmatic manuals .. . be responsible for providing all staffing necessary to successfully operate the facility .. be responsible for all human resources issues including compensation, benefits and retirement would be managed solely by the non-profit The development of agreements would take some time to prepare. The Task Force recommended that an agreement be developed and implemented as early as possible, to allow the City and the non-profit to transition operations within a six-month timeframe. Staff believes that this is a realistic goal. The Task Force report recommended an unspecified amount of City support during the transitional process, as well as on-going financial support from the City to supplement the non-profit's efforts to capture revenues from admissions, memberships, activity fees, facility rentals, and donations. This support could be provided through direct funding, in-kind 10-3 APRIL 28, 2009, Item~ Page 4 of5 services, or other means. Specific obligations would need to be negotiated and incorporated into the agreement(s). Two potential funding scenarios are included below, both for the transitional period (change from City operations to non-profit operations), as well as a five-year commitment. One funding scenario assumes a substantial increase in City revenue, and the other assumes no change.in projected revenues. Transitional Funding Scenarios (funding provided Julyl - December 31, 2009) Transition with "new" Transition without "new" revenue available revenue available $378,850 Operations $138,000 Operations $ 49,200 Public Works services $ 49,200 Public Works services $ 40,000 Utilities $ 40,000 Utilities $ 82,000 Debt Payment (1/2 year) $ 82,000 Debt Payment (1/2 year) Non-profit would be requested to provide Non-profit would be requested to provide $75,000 to supplement City funding and supplemental funding to provide limited or maintain current service levels at the Nature full public services at the Nature Center Center Annual Funding Scenarios (beginning January 1,2010) Annualwith "new" revenue available Annual without "new" revenue available at least $187,500 Jan 2010 - June 2010 at least $300,000 July 2010 - June 2011 at least $225,000 July20l1-Jline2012 at least $150,000 July 2012 - June 2013 at least $75,000 July 2013 - June 2014 $98,400 (annually) Public Works services $98,400 (annually) Public Works services $80,000 (annually) Utilities $80,000 (annually) Utilities $164,000 (annually) Debt Payment $164,000 (annually) Debt Payment Non-profit would provide all" required Non-profit would provide all required additional funding . to support operations, additional funding to support operations, programming, and staffing of the facility programming, and staffing of the facility Staff recommends that Council direct staff to: (1) pursue establishing a public-private partnership between the City of Chula Vista and a 501 (c) 3 non-profit entity to operate the Nature Center, (2) establish a target date of January 1,2010 to transition the Nature Center operations to the non-profit, (3) enter into negotiations with the Friends of the Chula Vista Nature Center as the desired non-profit entity, (4) request from the Friends of the Chula Vista Nature Center a financial commitment of $75,000 for the transitional period (July 1- December 31, 2009) and a Letter of Intent to enter into negotiations with the City. of Chula Vista by June 1, 2009 arid, (5) return to Council within sixty (60) days with a progress report. Staff is also recommending that Council approve, in concept, the two funding scenarios as a basis of initial negotiations with the Friends of the Chula Vista Nature Center.' 10-4 APRIL 28, 2009, Item~ Page 5 of5 DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council Members and has found no such holdings within 500' ofthe properties which are the subject of this action. CURRENT YEAR FISCAL IMPACT The Nature Center expenditure budget for FY08/09 is $1,250,100 (including in kind' expenses such as public work support services and debt service payments), which is partially offset by $318,100 in estimated revenues resulting in a net impact of $932,000. The resolution has no impact on current year funding. ONGOING FISCAL IlVIP ACT Specific recommendations for City funding commitments to the Nature Center would be . submitted to Council in a subsequent report following initial negotiations with a non-profit agency. Funding levels may vary significantly based on the City's ability to identify new revenue sources. As indicated in the tables above, with new revenue available, the City's total [mancial commitment to the Nature Center in FY09110 could be $908,750 (including in kind services and scheduled debt service payments) and partially offset by approximately $340,000 in revenues received from admissions, memberships, parking and gift shop resulting in a net impact of $568,750 to the General Fund. The additional impacts to the FY 2009/10 base budget would be $306,350 related to the operating costs which were cut as part of the Budget Reduction Plan approved by the City Council in January 2009. The base budget already includes the in-kind expenses and debt service payments. If new revenues are not identified, the City's commitment to the Nature Center in FY 09110 could be $480,400 (including in-kind services and scheduled debt service payments) with no offsetting revenues because the City would be working towards closing down the Nature Center. The additional impacts to the FY 2009110 base budget would be $218,000 related to the operating costs which were cut as part of the Budget Reduction Plan approved by the City Council in January 2009. The base budget already includes the in-kind expenses and debt service payments. The actual impacts will vary depending on the final structure approved by the City Council and the results of negotiations as the Nature Center transitions to a non-profit 50l(c)(3). . ATTACHMENTS N/A Prepared by: John Gates, Principal Recreation Manager, Recreation Department 10-5 RESOLUTION NO. 2009 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING STAFF TO PURSUE A PUBLIC PRIVATE PARTNERSHIP AND OPERATING AGREEMENT WITH THE FRIENDS OF THE CHULA VISTA NATURE CENTER FOR OPERATION AND M.At"\fAGEMENT OF THE NATURE CENTER, AND APPROVING. TWO CONCEPTUAL FUNDING PLAt"\fS AS A BASIS OF INITIAL NEGOTIATIONS WITH THE FRIENDS OF THE CHULA VISTA NATURE CENTER WHEREAS, The Mayor's Task Force for Creating a Sustainable Chula Vista Nature Center presented a preliminary report to City Council on April 7, 2009 ("Report"), WHEREAS, the Report made a number of preliminary recommendations related to the continued operation of the Chula Vista Nature Center; and WHEREAS, City Council referred those recommendations to staff for further consideration and development of a preliminary plan to potentially provide for a sustainable Chula Vista Nature Center, and WHEREAS, following City Council's direction, staff has developed recommendations as to how to proceed with operations, management, and oversight of the Chula Vista Nature Center. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby direct and authorize staff to: 1. Pursue establishing a public-private partnership and operating agreement between the City of Chula Vista and a 501 (c) 3 non-profit entity to operate the Nature Center. 2. Establish a target date of January 1, 2010 to transition the Nature Center operations to the non-profit. 3. Enter into negotiations with the Friends of the Chula Vista Nature Center as the desired non-profit entity. 4. Request from the Friends of the Chula Vista Nature Center a financial commitment of $75,000 by June 1,2009 as partial funding of the Chula Vista Nature Center during the transitional period of July I-December31, 2009. 10-6 5. Request from the Friends of the Chula Vista Nature Center, by June 1,2009, a Letter of Intent to enter into negotiations with the City of Chula Vista to establish a public private partnership and an operating agreement for future operations of the Chula Vista Nature Center. BE IT FURTHER RESOLVED, that the City Council of the City of Chula Vista does hereby approve the two conceptual funding plans identified in the Report, which provide options for City fmancial support for the Chula Vista Nature Center, to be utilized as a basis for negotiating an operating agreement with The Friends of the Chula Vista Nature Center. Presented by Buck Martin Director of Recreation and Nature Center 10-7 ~~\'1 WE?~~~N' ~<.o April 28, 2009 Dear Honorable Mayor and Council members: Thank you for your support of the Nature Center and it's critical environmental education programs. am impressed with the level of effort put forth thus far to ensure the sustainability of the Nature Center. On behalf of the Friends of the Chula Vista Nature Center, I would like to express our support for the Nature Center and desire to discuss a transfer of control of operations. Although the details of the staff presentation will be a point of negotiation, we are supportive of the concept. The timeframe cited is very aggressive and the funding levels proposed may not lead to the successful transition of the Nature Center. These items can be discussed in more depth with staff upon the Council's approval. We look forward to working with the City Council and Management to finding an operational solution that protects the City of Chula Vista's considerable investment while affording the community a quality facility with educational opportunities in the future. The Friends of the Chula Vista Nature Center agree, in principle, to the concept outlined by Mr. Martin and will work diligently with City Staff to make a successful transition of operations to the Friends of the Chula Vista Nature Center. Sincerel , "'\ ~~\I~ ~~~ ~Kenneth G. Weimer Chair, Friends of the Chula Vista Nature Cetner