TITLE:Adoption of City Council Resolution Approving the Integration of the CV Starr Community Center Operations & Establishing the Salary Rate Confirming the Pay Rates/Ranges for the CV Starr Employee Compensation Plan, Effective February 11 , 2024.Effective February 11, 2024TITLE:Adoption of City Council Resolution Approving the Integration of the CV Starr Community Center Operations & Establishing the Salary Rate Confirming the Pay Rates/Ranges for the CV Starr Employee Compensation Plan, Effective February 11 , 2024.Effective February 11, 2024AGENCY: City CouncilMEETING DATE: January 22, 2024DEPARTMENT: Finance/CV Starr PRESENTED BY: M.Wooden/ I. Whippy Email: [email protected]: City CouncilMEETING DATE: January 22, 2024DEPARTMENT: Finance/CV Starr PRESENTED BY: M.Wooden/ I. Whippy Email: [email protected] ITEM SUMMARY TITLE:
Adoption of City Council Resolution Approving the Integration of the CV Starr Community Center Operations & Establishing the Salary Rate Confirming the Pay Rates/Ranges for the CV Starr Employee Compensation Plan, Effective February 11 , 2024.
Effective February 11, 2024
TITLE:
Adoption of City Council Resolution Approving the Integration of the CV Starr Community Center Operations & Establishing the Salary Rate Confirming the Pay Rates/Ranges for the CV Starr Employee Compensation Plan, Effective February 11 , 2024.
Effective February 11, 2024
AGENCY: City Council
MEETING DATE: January 22, 2024
DEPARTMENT: Finance/CV Starr PRESENTED BY: M.Wooden/ I. Whippy Email: [email protected]
AGENCY: City Council
MEETING DATE: January 22, 2024
DEPARTMENT: Finance/CV Starr PRESENTED BY: M.Wooden/ I. Whippy Email: [email protected]
BACKGROUND & OVERVIEW
Development of the C.V Starr Community Center
In 1978, using Park Bond Act monies, Mendocino Parks & Recreation District (MCRPD) obtained a five-acre parcel known as Green Memorial Field in central Fort Bragg, and in 2006, began construction of its new facility at this location.
The C.V. Starr Foundation provided more than $20 million dollars in funding support for the facility, and in August of 2009, the C. V. Starr Community Center and Sigrid and Harry Spath Aquatic Facility opened to the Public. It is home to two pools, fitness and dance rooms, multi-purpose rooms, and the business offices. 2009-2011 Financial Challenges threatened the Operation of the Center In 2011, the District faced insolvency when its debt obligations and operating expenses far exceeded its revenue sources. During the period 2006-2011, the District spent all of its reserve funds, borrowed $2.3 million to refinance the regional park/golf course property and project costs, and borrowed and spent future property tax revenues. During this period, The District looked at various options for increasing revenues, including forming a Community Facilities District (CFD) or implementing a parcel tax. In October 2011, the District Board authorized the closure of the C.V. Starr Center to address its critical financial situation immediately. 2011-2012 The City of Fort Bragg and the MCRPD Negotiated a Plan & Agreement to provide for the continued operation of the CV Starr Center In October 2011, the Fort Bragg City Council discussed and authorized the strategy of placing a half-cent sales tax measure before the voters to provide a dedicated revenue stream for operation, maintenance, and capital improvements at the C.V. Starr Community Center.
November 2011 Memorandum of Agreement between the City of Fort Bragg and MCRPD for the Proposed CV Starr Community Center Special Sales Tax measure In November 2011, the City Council of Fort Bragg and the Mendocino Coast Recreation and Park District's Board of Directors approved an agreement to the terms and conditions of financing the operation of the Starr Community Center through the Special Sales Tax Measure. The key provisions of this agreement included the following requirements.
Transfer of Ownership of the CVSCC to the City of Fort Bragg Property Tax-Sharing Agreement
Operating Agreement
March 2012 – Sales Tax Measure Approved, Operating & Tax Sharing Agreements Implemented In March 2012, the passage of Measure A, the C.V. Starr Center Operation and Maintenance was fully funded by the half-cent sales tax. The C.V. Starr Center is owned by the City of Fort Bragg and operated by the MCRPD in accordance with an Operating Agreement between the two entities. The C. V. Starr Director, an MCRPD employee who reports directly to the MCRPD Board, is responsible for the day-to-day administration of the C. V. Starr Center, and the MCRPD Board is responsible for key policy decisions. The Fort Bragg City Council adopts the annual operating Budget for the Center and establishes the fee schedule. Together with the MCRPD, the City is responsible for ensuring that the Center operates in a fiscally sustainable manner.
The City of Fort Bragg took the title of the C.V. Starr Community Center on May 14, 2012, to ensure that the facility remains accessible to residents and visitors of Fort Bragg and the Mendocino coast- an action consistent with the previous Council's goal of promoting healthy lifestyles through active recreational facilities. 2020-21 COVID-19 & Impacts on the Center Operations
Due to the pandemic and shelter-in-place orders, the Center ceased operations on March 19, 2020. All employees but a few essential employees were laid off. During this time, management of the Starr Center began to work closely with the City of Fort Bragg. The financial future of the Starr Center became concerning. In July 2021, the C.V. Starr Center was able to reopen but with fewer employees. In the coming year, it became apparent that the cost of day-to-day operations had significantly risen, in some cases, more than doubled, particularly Utility, insurance, and personnel costs. In the new operating agreement, approved in 2022, the City's Finance Department took over CV Starr's Finance operations, including Payroll, budgeting, Accounts payable, and Accounting.
August 2023 – MCRPD gave formal notice to the City of Fort Bragg to terminate the CV Starr Operating Agreement On August 2, 2023, at a Special meeting of the MCRPD, the Board voted unanimously to terminate the operating agreement of the C.V. Starr Community Center and provided the City of Fort Bragg notice to start the process of dissolving the operating agreement immediately. The recently formed Ad-Hoc Committee and City Staff immediately began to formulate plans to take over the operations of the Center, with full absorption on February 12, 2024. These plans include an in-depth review to identify strategies and an operational model that would improve the overall cost-effectiveness, efficiency, and success of the Center—moreover, evaluating the financial feasibility of estimated costs to the City of Fort Bragg and the impacts on current City departments.
More importantly, establishing a financial plan and staffing model to ensure that the facility remains open and accessible to residents and visitors of Fort Bragg and the Mendocino coast- an action consistent with the previous Council's goal of promoting healthy lifestyles through active recreational facilitie
ANALYSIS
The C.V. Starr is an Enterprise fund in which services provided are financed and operated similarly to a private business. The fee schedule for these services is established to ensure that revenues are adequate to meet all necessary expenditures.
Revenues
The C.V. Starr Center Enterprise fund accounts for all operations of the Center, including the local sales tax, property taxes collected by the City as part of the property tax sharing agreement, and operating revenues (memberships). Operating revenues and user fees consist of three main categories:
General Admission revenues consist of user fees collected through drop-in visits, the sale of memberships, and other admissions. The Center has 3,626 active memberships, including punch passes purchased, a 14 percent increase from the prior year and a 28 percent increase from pre- pandemic. There are 1233 enrolled in the seniors Silver Sneakers program.
Registration revenues are collected for activities such as enrichment programs, swimming lessons, dance classes, kayaking, kids' night out, and art classes.
Rental of facilities include birthday party room rentals and pool rentals. The Mendocino Coast Sea Dragons Swim Team, Fort Bragg High School Swim Team, Mendocino High School Swim Team, and Tidal Waves (Special Olympics) Swim Team all rent lanes in the Lap Pool during weekday evenings for practice. Other schools and clubs, some from out of the area, rent the leisure pool by the hour. The Center is also a popular place to have Birthday Parties.
Funding Sources for CV Starr OperationsProperty Taxes,$283,127UserFees/memberships, $596,000Sales Tax,$1,175,441Funding Sources for CV Starr OperationsProperty Taxes,$283,127UserFees/memberships, $596,000Sales Tax,$1,175,441 Funding Sources for CV Starr Operations
Property Taxes,
$283,127
User
Fees/memberships
, $596,000
Sales Tax,
$1,175,441
Funding Sources for CV Starr Operations
Property Taxes,
$283,127
User
Fees/memberships
, $596,000
Sales Tax,
$1,175,441
The FY 2023/24 Adopted Budget estimates are $2.1 million in revenues from the three sources mentioned above. Listed below are the historical trends of revenues for the Center.
CV Starr Revenues - last 5 years1,400,000 1,200,000 1,000,000 800,000 600,000 400,000200,000 - FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Budget Property Taxes Sales Tax User Fees Other Revenues/GrantsCV Starr Revenues - last 5 years1,400,000 1,200,000 1,000,000 800,000 600,000 400,000200,000 - FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Budget Property Taxes Sales Tax User Fees Other Revenues/Grants CV Starr Revenues - last 5 years
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
- FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Budget Property Taxes Sales Tax User Fees Other Revenues/Grants CV Starr Revenues - last 5 years
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
- FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Budget Property Taxes Sales Tax User Fees Other Revenues/Grants The City of Fort Bragg City Council adopted by resolution an updated fee schedule that became effective on January 1, 2024. An additional $180k annually will be generated to keep up with increasing annual operating costs.
Over the past couple of months, the Center has also gone through some physical changes. Management realized the need to utilize as much dead space as possible. The Spin bikes were moved into the party room, making the room a multipurpose room. Cardio equipment was then moved to the formally known Spin room, thus creating extra space in the Gym. With this newly created space, and recognizing cost savings on past CIP projects, staff ordered several new pieces of Gym equipment. This Gym equipment will allow the Center to attract individuals who before felt the Center’s Gym to be inadequate.
In 2024, as recommended by our Finance Director, the City intends to develop a business plan and pricing policy that will serve as a management tool for establishing, implementing, and evaluating various fees and revenue options for the C. V. Starr operation. Establishing a business plan and pricing policy may allow for additional programs and facilities to be made available to enhance the level of service or quality of programs as well as provide higher quality services with limited operational dollars.
A business plan that establishes a cost recovery and pricing policy model will provide Staff with consistent guidelines in pricing admissions, use of facilities, and establishing program fees based on the individual benefits a user receives above a general taxpayer. The plan will help the Center address revenue goals to support operational costs, provide greater fairness in pricing services to users, and help support the implementation of future programs, facilities, and services. A cost recovery and pricing policy also allows the facility users, Staff, and general taxpayers better to understand the philosophy behind a program or service pricing. The model will help identify public services and individual benefit services that can be priced using either a partial overhead pricing strategy or a variable cost pricing strategy. Partial overhead pricing strategies recover all direct operating costs and some determined portion of fixed indirect costs.
The portion of fixed indirect costs not recovered by the price established represents the tax subsidy.
Expenditures & Capital Improvements
Tax revenues alone cannot sustain the daily operational costs of the C.V. Starr Community Center or set aside reserves to fund the increasingly extensive list of capital improvements needed, totaling $2.6 million in the next five years. In 2020, the Center was closed due to COVID restrictions. As a result, the Center was able to build up reserves to $2.2 million at the end of FY 21/22 from $702k pre-COVID reserve levels. This resulted from COVID relief funds from State Parks of $602k and savings in operating expenditures. In the FY 2023/24 adopted Capital Improvement Budget, $1.7 million is approved to replace the HVAC Air intake system, depleting reserves to $520k. City staff is currently assessing the feasibility of concluding the engineering work on the HVAC system within the current fiscal year. Post-pandemic presented further financial challenges for the center in recruiting lifeguards and substantial increases in operating costs, particularly utilities and insurance.
FY 2023/24 Adopted Operating Budget is $2.1 million, an increase of 17% from the prior year. The $1.4 million personnel budget includes 14 full-time positions receiving benefits such as medical insurance, vacation, and sick leave and 59 part-time positions averaging 5 hours a week, with a shared District Administrator at the time of Budget development.
Expenditures
FY 19/20
FY 20/21
FY 21/22
FY 22/23
FY 23/24 Budget
Salaries & Wages
$ 771,640
$ 177,011
$ 669,901
$ 1,021,448
$ 1,331,108
Benefits
$ 90,326
$ 87,709
$ 96,438
$ 98,116
$ 108,669
Non-Personnel
535,428
266,097
674,393
638,131
680,938
Total
$ 1,397,394
$ 530,817
$ 1,440,732
$ 1,757,695
$ 2,120,715
STAFFING ANALYSIS
The Staffing plan and cost for both full-time and part-time employees were evaluated. The Center consists of three main departments: Guest Services (front desk), Maintenance, and Recreation, which encompasses both pools and fitness classes on the gym side. As depicted below, the number of permanent employees employed by the center is previously slightly higher than other staffing structures utilized in the operation of similar size and scope facilities, according to the operation assessment and analysis completed in 2015 by Shellito Training and Consulting.
Attached are the two different organizational charts. One represents the organizational structure of the Center as of July 2021, with certain employees split between the District and the Center, while the other represents the current organizational structure, a hundred percent C.V. Starr.
MCRPD & CV STARR ORGANIZATIONAL STRUCTURE 2021
Finance/Business Manager
Depicted above is the 2021 Organization chart between the District and the CV Starr Center- There was a District Administrator, Business Manager and Finance Officer. When the Center reopened in July 2021, the position of the Business Manager was absorbed by the District Administrator. In September 2022, the position of Finance Officer was eliminated, and all CV Starr finance’s function were absorbed by the City of Fort Bragg Finance Department. Eliminating the Business Manager position resulted in savings of $58,560 per year while eliminating the position of Finance Officer saved another $61,505 per year. It should be noted that these two positions were shared between CV Starr and MCRPD.
Guest Services Department
In 2021 the Guest Services department had a total of four full-time employees and two part-time employees which were needed to staff the center six days a week from 6 a.m. to 7 p.m. daily with a total personnel cost of $234,559. Moving forward in 2024 the Guest Services Department will consist of three full-time and one part-time employee with a total personnel cost of $149,440.00, resulting in a saving of $85,119.00 annually.
Maintenance Department
The department has four full-time positions, and two part-time positions with a total annual personnel cost of $238,398. Management is monitoring and evaluating the department’s needs to identify possible cost savings while ensuring operational needs are covered.
Recreation Department
The Recreation Department has experienced post-pandemic staffing challenges to fill vacant lifeguard positions. While the management staff has covered the shortages, it has become physically impossible to fill in all the gaps while still trying to keep up with the demands of daily responsibilities. The aquatics side urgently needs to fill one full-time Coordinator and one full-time Senior Lifeguard position. The proposed budget includes $390,987 in personnel costs, which includes 20 part-time lifeguards averaging 4-10 hours per week. Pre-pandemic, the Center offered 72 fitness classes at an annual cost of $112,320. Staff evaluated these classes, accounting for attendance levels and the cost of instructors, and recognized the need to reduce the number of classes offered substantially. Management continued to educate themselves on industry standards, by reaching out to similar agencies/facilities, attending various training courses, and a workshop that specialized in financial sustainability. During this workshop, it was realized that no other facilities offer this many classes to their members. It was further recognized that as a publicly funded facility, it is our fiduciary responsibility to be mindful of the programs we are subsidizing, thus creating programs that encompass the greater community. With the proposed changes, the cost of instructor-led classes will decrease to 27 classes at $54,600. Going forward, in addition to these 27 classes, management will be offering Dance Room availability to independent contractors, opening the doors to create a true community center space that everyone can enjoy for decades to come.
CV STARR ORGANIZATIONAL RE-STRUCTURE 2024
FISCAL IMPACT:
As the City of Fort Bragg integrates approximately 12 full-time employees, 20 part-time employees, and independent contractors, personnel benefit costs are expected to increase to $528,936.This increase is partially offset by eliminating current CV Starr benefits, resulting in the most substantial cost escalation in the proposed transition. The City's benefits package, covering dental, medical, vision, and CalPERS, can reach up to $40,000 per employee, depending on the benefit plan and total compensation. Additionally, $100,000 is allocated as part of the City's Cost Allocation Plan to account for indirect costs like Accounting, IT, and Human Resources, which would be incurred by the C.V. Starr enterprise and reimbursed to the General Fund. Accounting, IT, Legal, and Human Resources are categorized as indirect costs since these shared administrative services expenses benefit the entire City organization.
Each City department or division bears costs for supporting other City departments, and the allocation of indirect costs involves estimating and distributing these expenses to City programs or functions to approximate their full cost. The City has engaged a consultant team to systematically review the City cost allocation plan, incorporating the C.V. Starr Enterprise fund and establishing a rational methodology for fairly charging back the cost of internal services to City departments. C.V. Starr will be responsible for covering their proportionate costs for shared services.
Based on the projections, a shortfall of $69k to $198k in FY28/29 for the next five years would need to be addressed. The projections already include the decrease in the number of fitness classes/programs, resulting in cost savings of $51,762 and not filling the Guest Services Supervisor position of $85,000. Staff will continue to evaluate the current staffing model and operating costs to improve the overall cost-effectiveness efficiency to achieve financial stability and maintain the center's operations.
Capital Improvements Program (CIP) -5 year outlook
CV Starr Capital Improvements -Five-Year Fiscal Plan
CIP Improvements FY 2023-2024 FY 2024-2025 FY 2025-2026 FY 2026-2027 FY 2027-2028
HVAC - AIR INTAKE PROJECT
1,600,000.00
BACKWASH SYSTEM
8,000.00
AUTO FILL SYSTEM
ONE SHOWER IN MEN'S LOCKER ROOM
25,000.00
MEN'S LOCKER ROOM FLOOR
WOMEN'S LOCKER ROOM FLOOR
FIRE PROGRAMER BOX
30,000.00
ASPHALT SEALING
40,000.00
HOT WATER BOILER - Heat Building
30,000.00
HOT WATER BOILER - Heat Building
30,000.00
PHASE 1ELECTRICAL BOX - BLD WIDE BREAKERS, ECT - BLD WIDE 40,000.00
PHASE 2 ELECTRICAL BOX - BLD WIDE BREAKERS, ECT - POOLS 40,000.00
HRU1 EXHAUST BLOWER - GYM FITNESS ROOM
50,000.00
HRU2 EXHAUST BLOWER - EAST HALLWAY
50,000.00
HRU3 EXHAUST BLOWER- FIT/DANCE ROOM
50,000.00
HRU4 EXHAUST BLOWER - SPIN ROOM
50,000.00
HRU5 EXHAUST BLOWER - RECEPTION DESK
50,000.00
HRU6 EXHAUST BLOWER - FRONT BATHROOMS
50,000.00
HRU7 EXHAUST BLOWER - FRONT OFFICES
50,000.00
HRU8 EXHAUST BLOWER - MULTI- ROOM
50,000.00
HRU9 EXHAUST BLOWER - LOBBY AREA
50,000.00
HRU10 EXHAUST BLOWER - CENTER OFFICES
50,000.00
HRU11 EXHAUST BLOWER - WOMEN'S LOCKER ROOM
50,000.00
HRU12 HRU10 EXHAUST BLOWER -MEN'S LOCKER ROOM
50,000.00
HRU13 EXHAUST BLOWER - EAST CORRIDOOR
50,000.00
SKYLIGHTS OVER FRONT DESK
100,000.00
POOL HEATER - LEISURE POOL BOILER
35,000.00
POOL HEATER - COMP. POOL BOILER
35,000.00
TOTAL
1,608,000.00
295,000.00
380,000.00
130,000.00
250,000.00
IMPLEMENTATION/TIMEFRAMES:
The City received notice from the MCRPD District to terminate the operating agreement on August 2, 2023, allowing a 6-month transition period. If approved tonight, the CV Starr team will work with City Staff to ensure a smooth transition on February 11, 2024. The 12 Full-time employees and 20 part-time employees will be integrated into the City of Fort Bragg.
ATTACHMENTS:
Exhibit A: Employee Compensation schedule
Exhibit B: Notice from the MCRPD Board
Exhibit C: C.V Starr Operating Agreement
Exhibit D: FY 24 CV Starr Adopted Budget