Monterey City Council
May 24, 2023

Council Chamber
580 Pacific Street
Monterey, California
and Teleconference Location:

The Hampton Inn and Suites
2850 Constitution Dr.

Room #134
Livermore, CA 94551
Monterey City Council
Special Meeting Agenda

AMENDED AGENDA
Council Special Meeting
Wednesday, May 24, 2023
4:00 – 5:30 PM
City Council
Tyller Williamson, Mayor
Kim Barber, Councilmember,
District 1
Gino Garcia, Councilmember
Alan Haffa, Councilmember
Ed Smith, Councilmember,
District 2
City Manager
Hans Uslar
How to participate in this meeting:
 Written comment: Members of the public may submit comment(s) to [email protected] until ½ hour before the start of the meeting. These messages are not read aloud during the meeting but are made available to the meeting body and public at https://monterey.org/submitted-comments. All comments received become part of the record.
 In-Person: Please see the meeting location listed above. Wearing a mask is recommended and encouraged.
 Remote via ZoomGov Webinar:
o Join on a computer or smartphone: https://montereyorg.zoomgov.com/j/1607729333 An up-to-date version of the Zoom software must be used.
o Or join by telephone: Dial 833-568-8864 (Toll Free), 669-254-5252 (Campbell, CA) or 646-828-7666 (NY). If one number doesn’t work, please try another.  Enter Webinar ID: 160 772 9333 #
 If prompted to enter a participant ID, press #
 To “raise your hand,” dial *9. Once called upon, dial *6 to unmute o Need help using or updating Zoom? Read our Zoom Meeting Instructions (PDF)  This meeting will also stream live for viewing only on youtube.com/cityofmonterey (10 second delay) and on Comcast Channel 25 (up to 90-second delay).

TELECONFERENCE NOTICE
Pursuant to California Government Code Section 54953(b)(3), this City Council meeting will include teleconference participation by Councilmember Smith from the location listed above, which shall be accessible to the public pursuant to California Government Code Section 54954.3.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

PRESENTATIONS

1. Recognize National Public Works Week 2023 (Not a Project Under CEQA per Article 20, Section 15378 and Under General Rule Article 5, Section 15061) 5/24/2023 4:00:00 PM
2 STUDY SESSION
STUDY SESSION items are used to provide information to the City Council and answer their questions to clarify issues. Study Sessions provide a setting for informal discussions between staff, consultants, board, commission,committee members and the City Council regarding specific programs, projects or policies. Council does not take formal action on the items.

2. Receive Presentation on Reinvesting in the Monterey Sports Center: Emerging Trends Based on the Operational Assessment Sports Facilities Advisory (Not a Project Under CEQA Article 20, Section 15378 and under General Rule Article 5, Section 15061)

ADJOURNMENT
Members of the public have the right to address the City Council on any item on the Agenda, before or during its consideration [G.C. §54954.3(a)]. The Mayor will formally open the floor for public comment on items such as "Public Appearance" and "Public Hearings." Comment may be made via the method described in the Important Notice (re: COVID-19) at the top of the agenda.

Writings distributed for discussion or consideration on these matters within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, are available at: monterey.org/submitted-comments and in the City Manager’s Office at 580 Pacific St., Room 1, Monterey, CA 93940 during regular business hours.

Information distributed to the Council at the Council meeting becomes part of the public record. A copy of written material, pictures, etc. should be provided for this purpose.

City Council Meetings are cable cast live and videotaped for replay on Monterey's Government Access Channel 25 by Access Media Productions (AMP).

CITY OF MONTEREY'S 24-HOUR SUGGESTION HOTLINES:

Voicemail: (831) 646-3799
Fax: (831) 646-3793
Email: [email protected]
WebPage: http://www.monterey.org
INTERPRETATION: The Monterey City Council invites and encourages public participation at its meetings. Requests for language interpretation may be made by contacting the City Clerk at [email protected] or 831-646-3935. The City Clerk will make every effort to accommodate requests for interpreter assistance. Requests should be made as soon as possible in advance of any meeting of the City Council. The City is committed to addressing language interpretation requests swiftly in order to maximize public participation.

ACCESSIBILITY: The City of Monterey is committed to including the disabled in all of its services, programs and activities. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at [email protected] or (831) 646-3935. Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will be accommodated to the extent feasible. For communication-related assistance, dial 711 to use the California Relay Service (CRS) to speak to City offices. CRS offers free text-tospeech, speech-to-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at (831) 646-3935 to coordinate use of a device.

Upcoming city meetings are listed at http://isearchmonterey.org More information is available by calling (831) 646-3935 5/24/2023 4:00:00 PM
3 Council
Agenda Report
№08/22
FROM: Andrea Renny, PE, PTOE, Public Works Director
Prepared By: Jesus Rios, Engineering Project Manager
SUBJECT: Recognize National Public Works Week 2023 (Not a Project Under CEQA per Article 20, Section 15378 and Under General Rule Article 5, Section 15061) RECOMMENDATION:

That the City Council receive a presentation to recognize National Public Works Week 2023.

VALUE DRIVERS:

In collaboration with our community partners, work to improve the quality of life of all of our community members by fostering diversity, equity, and inclusion; championing equitable access to affordable housing; and maintaining a safe environment.

POLICY IMPLICATIONS:

It is within the City Council’s purview to acknowledge the people and services delivered by the City of Monterey by recognizing the contributions of its workforce. National Public Works Week 2023 is an appropriate recognition by the City Council.

FISCAL IMPLICATIONS:

None.

ENVIRONMENTAL DETERMINATION:

The City of Monterey determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA)(CCR, Title 14, Chapter 3 (“CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

ALTERNATIVES CONSIDERED:

None.

Date: 5/24/2023
Item No.: 1.

Council Special Meeting, 5/24/2023, Item No. 1., Item Page 1, Packet Page 4 DISCUSSION:

For National Public Works Week, many states, provinces, cities/towns and municipalities from across North America come together to celebrate with official government proclamations and resolutions in honor of the contribution Public Works makes to their communities: in planning, building, managing and operating the heart of our local communities and in building the quality of life. The American Public Works Association (APWA) announced "Connecting the World Through Public Works" as the theme for the 2023 National Public Works Week.

Public Works builds and maintains the City’s necessary infrastructure, supporting the health and economic vitality of the community, and helping create a great place to live. In the City of Monterey this includes our many divisions from engineering, construction management, environmental regulations, parking, general services, streets & utilities, harbor, and fleet services.

The City of Monterey’s largest department is the Public Works Department, comprised of six divisions working together to support the City’s infrastructure system:

Engineering, Construction Management, and Environmental Division.

This division provides engineering management of the public right-of-way, traffic engineering, civil engineering, administration of the Capital Improvement Program (CIP), Neighborhood Capital Improvement Program (NCIP) and projects assigned by the U.S. Army through the Intergovernmental Services Agreement (IGSA). The Division works with other agencies, utility providers, residents, project stakeholders, and other City departments, to ensure that information is coordinated in a smooth and timely fashion.

Parking
This division operates 31 parking facilities with approximately 3,500 off-street parking spaces. In addition to off-street parking spaces, there are over 3,000 on-street spaces in the Downtown, Cannery Row and Lighthouse areas of the City. The Parking Division works with businesses, residents, institutions and visitors alike to meet parking needs.

Council Special Meeting, 5/24/2023, Item No. 1., Item Page 2, Packet Page 5 General Services
The General Services Division of the City of Monterey provides building maintenance and custodial services for all City buildings and facilities through cost effective repair, renovation and routine maintenance. The General Services Division also provides these same services to military partners. Monterey is proud to celebrate nearly 25 years of partnership with its military partners!

Street & Utilities
The mission of the Streets Division is to maintain the City of Monterey’s roadways, sanitary sewers, storm drains, signage, traffic signals, and related infrastructure. The Streets Division maintains 101 centerline miles of roadway, 104 miles of sanitary sewer, 43 miles of storm drain culverts, over 5,000 regulatory signs, and 56 signalized intersections. Streets crews are on standby, 24 hours a day, 7 days a week, 365 days a year to respond to sanitary sewer overflows, vehicle accidents where City infrastructure is damaged, and to support public safety.

Harbor
This division provides access to a variety of recreational, as well as commercial opportunities for residents and visitors alike in a scenic setting, and continues to improve services and infrastructure, allowing for even greater access to the area for fishing or leisure purposes.

Fleet Services
The Fleet Division of the Public Works Department is a fully functional, modern vehicle and equipment repair facility with certified technicians and up-to-date equipment. The mission of the Fleet Services Department is to provide for the maintenance of City owned vehicles and equipment. The department supports the City Council’s priorities related to associated costs of ownership of all vehicles and equipment. This equipment is used in the everyday support of City Employees in performance of their duties to help promote a high quality of life for City residents.

The storm events this year highlighted the preparation work and maintenance that resulted in limited damages and quick responses from the department.

The American Public Works Association (APWA) announced "Connecting the World Through Public Works" as the theme for the 2023 National Public Works Week.

An oral report will be presented at the meeting.

AR/jr
Attachments: 1. Proclamation
Writings distributed for discussion or consideration on this matter within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, will be made available at the following link:
https://monterey.org/Submitted-Comments
Council Special Meeting, 5/24/2023, Item No. 1., Item Page 3, Packet Page 6

ATTACHMENT
Council Special Meeting, 5/24/2023, Item No. 1., Item Page 4, Packet Page 7 Council
Agenda Report
№08/22
FROM: Karen Larson, Parks and Recreation Director
Andrea Willer, Sports Center Manager
SUBJECT: Receive Presentation on Reinvesting in the Monterey Sports Center: Emerging Trends Based on the Operational Assessment by Sports Facilities Advisory (Not a Project Under CEQA Article 20, Section 15378 and under General Rule Article 5, Section 15061)
RECOMMENDATION:

That the City Council receive a presentation and the report from Sports Facilities Advisory.

VALUE DRIVERS:

In collaboration with our community partners, work to improve the quality of life of all of our community members by fostering diversity, equity, and inclusion; championing equitable access to affordable housing; and maintaining a safe environment.

Serve as stewards of the City’s financial resources through sound economic vitality efforts, streamlining operations, reasonable revenue enhancements, visionary long-term planning, fiscal transparency, and community partnerships.

POLICY IMPLICATIONS:

No policy implications are associated with receiving the report; however, policy implications may be necessary in the future.

FISCAL IMPLICATIONS:

No cost is associated with receiving the report. The cost of the consultant to prepare the Operational Assessment is $53,000. Expenditures and/or cost savings may result from future actions taken by the City Council based on information gained from the Operational Assessment.

ENVIRONMENTAL DETERMINATION:

The City of Monterey determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CCR, Title 14, Chapter 3 (“CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

Date: 5/24/2023
Item No.: 2.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 1, Packet Page 8 ALTERNATIVES CONSIDERED:

The Council may choose not to receive the report, but that is not recommended.

DISCUSSION:

The Pandemic’s Impact on the Fitness Industry
The pandemic took an outsized toll on public health and had a far-reaching impact on all business sectors, including the fitness industry. State mandates, social distancing, remote work, and contactless interactions led to $15 billion in lost revenue for clubs and fitness studios in the United States. When gyms closed, people were forced to rethink their fitness routines. There was a surge in residential fitness equipment sales. Virtual fitness programs exploded, and outdoor fitness and recreational activities boomed. People formed new habits, which has had profound implications on the industry as a whole.

Fiscal Performance for the Monterey Sports Center
Since its inception, the Monterey Sports Center (MSC) has served as the community’s “swimgym” and recreation center. Thousands of residents and families have used the Sports Center as their premier fitness facility.

The City’s Fiscal Health Response Plan, launched in 2018, calls for the City to balance the City’s checkbook and solve long-term funding needs by changing the way we do business to be more streamlined through operational reductions where appropriate. The pandemic’s toll on the City’s budget, which lost over $32M in General Fund revenues, forced the City to rethink how it delivers services in all areas, including the Sports Center. Since then, staff has been working towards cost containment efforts while ensuring that the Sports Center maintains its goal of providing outstanding services to the community.

Pre-pandemic, in Fiscal Year 2018-19, the Monterey Sports Center had approximately 8,000 members, an annual revenue near $4.5M, and expenditures of approximately $5.7M. This resulted in a General Fund subsidy of $1.2M, equal to 78% cost recovery from fees for services. As in years past, this Monterey Sports Center operational revenues and expenditures do not include debt service and are not included in this cost recovery analysis.

Post-pandemic, MSC has drastically adjusted expenses, and both membership and revenue are currently trending about 66% of pre-pandemic activity. Staff has stayed engaged with members, increased marketing efforts, and focused core competencies while also introducing new programs to recruit and retain members. As of May 19, 2023, with approximately six weeks remaining in the fiscal year, the Monterey Sports Center has around 8,000 members, annual revenues of $2,665,775, and expenditures of $4,022,050. The YTD General Fund subsidy is currently $1,356,275. While not yet reaching pre-pandemic recovery levels, the Monterey Sports Center is outpacing the FY23 budget projections and currently tracking to collect $2,995,272 in revenue and expend approximately $4,647,202 resulting in an estimated $1,652,430 in subsidy or 64.5% operational cost recovery.

The Sports Center continues to focus on both sides of the ledger: increasing revenues through memberships and programming and managing expenditures through careful spending and costcontainment.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 2, Packet Page 9 Scope of the Operational Analysis
While the Sports Center’s membership sales, program registration, and revenue are steadily rebounding, a full operations assessment identified the strengths weaknesses, threats, and opportunities that are impacting recruitment and retention of members and program participants.

In June, the City engaged Sports Facilities Advisory (SFA) to analyze the current performance and provide recommendations for the optimization of the Monterey Sports Center. This presentation summarizes the work completed, strategic recommendations, and the next steps that SFA proposes that the City of Monterey implement to achieve greater performance and operational efficiencies to reduce annual dependency on General Fund revenues.

In July 2022, SFA facilitated a planning and strategy session with City staff to determine the definitions of success for the future of the Monterey Sports Center. As a result of that exercise, SFA and the Project Team determined that this optimization initiative must achieve the following operational and organizational criteria to be deemed successful:
 Ensure that the Monterey Sports Center provides first-class customer fitness, wellness, and recreation experiences, while embracing community diversity through accessible, affordable membership options.  Develop strategies that will embrace existing and new opportunities to enable the Monterey Sports Center to continue to be the area’s leader for fitness and wellness.
 Implement strategies to improve the financial performance of the Monterey Sports Center to reduce reliance on the general fund, while diversifying and expanding revenue opportunities.

Following the site visit and in-person stakeholder and user engagement sessions, SFA developed, conducted, and analyzed a community survey that was specific to the Sports Center. The primary intent of the survey was to collect and evaluate responses from residents and facility users to quantify the likelihood of market segments using the MSC and to decipher community needs/desires for future enhancements to the operations, programming, and structures within the Monterey Sports Center. The goals of the survey were to assess the items below:
 Past facility use
 Perceptions of the Sports Center as well as other existing facilities in the market
 Likelihood of participating in existing and new offerings  Reasons for not using the Sports Center
 Facility amenity requirements and/or preferences
 Pricing insights and opinions on the area
 Desired programs, classes, membership options, & other community functions  Perceptions and potential for funding of future park and facilities development/enhancements
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 3, Packet Page 10 Patron Survey
The survey was developed and administered through a web-based survey program for a period of 4-weeks (August 29, 2022 – September 25, 2022). A total of 493 responses were received during the survey period. Of these responses, 79% of the respondents completed the entire survey. It is important to note that 54% of the respondents to the survey question regarding residency/home ZIP Code noted that they live within a Monterey ZIP Code (93940), while 10% of question respondents noted that they live in the Pacific Grove area, and 10% noted that they live in Seaside (based on ZIP Code responses). 35% of member respondents noted that they visit the Monterey Sports Center between 10 and 20 times a month, while 35% of non-member respondents indicated that they visit the MSC between one and nine times a month. A report of the detailed survey findings and responses was delivered to the Project Team in October 2022, and is included as a supplement to the final report.

Summary of Recommendations
Based on the definitions of success outlined above, an analysis of the historical financials, programs, and input derived from the community survey, SFA created recommendations to create operational efficiencies, improve program performance, and expand opportunities to drive new and additional revenue.

Whereas the Sports Center recovered 78% of its operating costs in 2019, the recommendations provided by SFA are projected to help to drive operational cost recovery to over 90% in the next five years. It is important to note that the recommendations included contain specific items associated with operational performance, such as programming, pricing, and cost containment, as well as reconfiguring and realigning staff positions to enhance program development associated with participation and revenue growth. The implementation timeline will allow the City of Monterey the opportunity to assess the net benefits of each recommendation and determine appropriate actions and allocations within the financial, organizational, and operational capacity of the city.

The primary recommendations of optimization include the following:
 Conduct annual pricing analysis to assess and align all membership categories and programs to be market comparable and competitive. Retain program participation strategy to recover 100% or greater of Sports Center program expenses.
 Review annual operating expenses to ensure that they align with industry benchmarks. The included pro forma documents provide additional details regarding potential reduction in operational subsidy associated with revenue and program growth noted in this report.
 Expand targeted marketing to attract and increase membership of Gen Z and Millennials (15-34). Continue to grow membership to reach 2018 and 2019 membership levels.
 Continue to implement and assess SmartRec system to ensure accurate membership reporting, membership retention, and customer satisfaction through personalized outbound communication, surveys, etc. Utilize financial components of SmartRec to stay abreast of real-time data regarding revenue recognition.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 4, Packet Page 11  Expand operations, including operating hours, through the development of specific positions to grow marketing and member retention, fitness and recreation programs, and customer/member service.
 Contain costs associated with custodial/facility attendance, fitness instructors, and fitness equipment by exploring third-party contract services/equipment lease programs.
 Expand secondary revenue through dedicated third-party medical/wellness lease space, advertising, and vending.

Current Performance Compared
As demonstrated in the charts below, MSC’s cost recovery has decreased from 78% in FY19-20 to a projected 50% in FY22-23. The operating additional General Fund support has grown from $1,255,665 in FY19-20 to $2,543,151 in FY22-23. However, revenue for the current fiscal year (FYTD 22-23) has been growing strongly and has currently reached $2,656,676, which is 100.3% of the projected budget revenue and represents a 68% cost recovery rate. There are still approximately 6-7 weeks remaining in the budget year. Please note that the charts below utilize the FY23 Amended Budget numbers and not current year to date figures.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 5, Packet Page 12 Strategies and Recommendations
Working with the Project Team and utilizing real-time strategies for best practices for revenue generation backed by SFA’s operational expertise and real-world financial data from over 700 facilities across the country, SFA evaluated revenue potential, identified opportunities, and set targets to increase revenue over the next five years. The primary drivers for revenue growth are:

1. Participation growth

2. Fee increases

3. New revenue opportunities
These drivers for revenue growth are also consistent with the City’s Fiscal Health Response Plan’s CORE strategy, which includes “Revenue enhancements through economic development, fees, taxes, and cost recoveries.”
By utilizing these strategies, in addition to cost containment and employee retention, SFA’s projection of MSC’s financial performance in FY22-23 versus FY27-28 results in an operational cost recovery of 94% and a general fund subsidy of $348,460, including bond payment and capital. The implementation of these strategies is projected to result in a reduction in subsidy of $1,826,374 when comparing FY22-23 to FY27-28. The charts below detail the cost recovery from 2019—SFA projected Year 5. Expenses in the chart below include equipment outlay as detailed in the MSC budget documents.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 6, Packet Page 13 Throughout this analysis, SFA addressed the need to reduce the financial gap of the MSC to “Pre-Covid” performance levels, presented recommendations to maintain access to high-impact participative programs, and suggested program and facility improvements to enhance the reputation of the MSC as the area’s leader for fitness and wellness.

As demonstrated in the Historical Financial Review Performance Section of this report, MSC’s FY22-23 budget projects a $2.5 million deficit when accounting for all revenue and expenses attributed to the MSC (expenses and payments associated with bonds are excluded from this number. The subsidy is $3.08 million including the bond payment and capital). The tables below summarize each primary category of revenue and expense noted in the MSC FY22-23 budget.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 7, Packet Page 14 To begin its financial assessment and create a baseline from which to improve, SFA performed a detailed analysis of the MSC FY22-23 budget, as well as a historical budget review, focusing first on operations. SFA isolated operating revenue, as well as operation expenditures included fixed categories for indirect or cross-department service charges (expenses associated with building maintenance, benefits, risk management, information services, and other City of Monterey provided operational services).

Working with the MSC leadership team and utilizing real-time strategies for best practices for revenue generation backed by SFA’s operational expertise and real-world financial data from over 700 facilities across the country, SFA evaluated revenue potential, identified opportunities, and set targets to increase revenue generation and control expenses over the next five years.

The following table summarizes the forecasted revenue, cost of goods sold, and operating expenses for the next five years. The financial performance details have been provided in the full financial documents provided as separate documents and are supplements to the report.

As demonstrated in the previous table, the operations at the Monterey Sports Center decreases the operational subsidy (before the bond payment) from $2.5 in FY22-23 (as noted on the previous page) to $643,576 in YR5 (FY27-29). It is important to note that capital replacement and the existing bond payment are noted below operating EBITDA and are reflected in total Net Income. Including the bond and capital outlay expenditures, total net income declines from -$1.7 million in YR1 to -$1.26 million in YR5. SFA’s projection of revenue potential results in revenue growth of approximately $2.3 million from FY22-23 to FY 27-28.

As demonstrated in the table above, the operational performance at the MSC decreases from a $3.08 million subsidy in FY22-23 to a $348,480 subsidy in YR5 (FY27-29). It is important to note that capital replacement and the existing bond payment are noted below operating EBITDA and are reflected in Total Net Income/Subsidy.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 8, Packet Page 15 To explain each of the strategies and how the financial impact was calculated, the following information provides context to SFA’s projections and the development of the pro forma documents.

1. Participation Growth
 Sports/Gym Programs: as a division within the MSC that generates revenue and has the potential to increase program participation and program types, SFA has shown increases in the following:
 Youth programming/camps – 25% participation growth over the five-year period, including the addition of a kindergarten half-day camp beginning in Year 1.
 Basketball – 18% increase in participation with 5% in Yrs. 2 & Yrs. 3 as programs continue to develop and a 4% in Yrs. 4 & Yrs. 5.  Volleyball – 29% increase between Yrs. 2 and Yrs5.
 Membership: as the division within MSC that is the main generator of revenue and has potential to return to pre-Covid participation, SFA has shown an increase of 15% in Yr.1, 10% in Yr.2, 5% in Yr.3, and 3% in Yr.4 & Yr.5. This growth considers the strategies regarding membership staff and targeted membership campaigns to attract and retain members in all categories.  Aquatics operations and programs are stable and indicate some potential for growth and SFA recommends a 2.5% growth each year over the five-year period.

2. Fee Increases
 While SFA recommends that the MSC staff conduct annual pricing analysis to assess and align all membership categories and programs to be market comparable and competitive, the following fee increases were used in the pro forma and are based on industry best practices.
 Sports/Gym programs – youth programming includes a 10% fee increase over the five-year period; basketball includes a 15% fee increase over the five years; volleyball includes a 15% increase over the five-year period with the increases suggested for Yrs. 3 and Yrs. 5 after new programs are established.
 Memberships include a 10% fee increase in all categories spread over the five-year period. SFA recommends a 5% increase in Yr.2 and a 5% increase in Yr.4.
 Aquatics includes a 10% fee increase in all categories spread over the fiveyear period. SFA recommends a 5% increase in Yr.2 and a 5% increase in Yr.4.

3. New Revenue Opportunities
 Sports/Gym programs -youth programming includes the implementation of a new kindergarten half-day camp beginning in YR1; basketball includes the addition of a fall adult basketball league; volleyball includes a new fall volleyball league, as well as skills clinics.
 Vending/Concessions – SFA recommends exploring full-service vending contracts for a limited number of health conscious/nutrition vending machines. This will provide members a benefit during times when concessions are unavailable or closed.

Council Special Meeting, 5/24/2023, Item No. 2., Item Page 9, Packet Page 16  Tenant revenue – SFA recommends leasing the quad of offices for a complimentary medical/therapy/wellness provider. This may include a physical therapist, individualized sports training, massage therapy, or similar health and wellness focused provider. This revenue would be on a yearly square foot basis.
 Media/advertisement/sponsorship income – SFA recommends exploring digital and static sponsorship opportunities for spaces within the MSC.

Secondary media/advertising/sponsorship could enhance the annual revenue of the MSC more than $50,000 annually.

Aligning the goals and desired outcomes of the Monterey Sports Center with the net benefits of optimization and the projected implementation timeline provided by SFA enables the City of Monterey the opportunity to analyze facility and program performance, support achievements, and redirect/adjust/adapt the project team to accommodate for any delays. While the economic benefit of optimization is noted in the pro forma models, the direct and indirect benefits of improving programs, leagues, events, and aquatic offerings have an impact on the health and wellness of the community. Goals that may take place over a period of years will need regular monitoring to determine effectiveness and possibility scalability to produce the best long-term results.

Conclusion
It should be noted that throughout this process, SFA has identified a significant number of strengths within operations, financial performance, the quality of the facility, and the customer experience. The City is proud of the dedicated, talented, and customer service-oriented team that makes the Monterey Sports Center known as “the premier fitness facility on the Monterey Peninsula.” The City of Monterey staff continues to help the MSC thrive into the future. The MSC team has been instrumental in rebounding from the pandemic by working to retain and recruit members, expand program participation, and deliver safe, quality, and outstanding services at the Sports Center while managing expenses.

The implementation of Sports Facilities Advisory’s insights and recommendations regarding how to enhance revenue, address cost containment, and optimize operations has begun. The good news is that Sports Center guests are returning to the facility, revenues are increasing, and staff is exploring different avenues toward improved marketing and sponsorships. The concentrated and unified effort will continue, and will require the support of the City Council, Sports Center patrons, community partners, donors, and sponsors to ensure the Monterey Sports Center’s trajectory to success.

KL/aw
Attachments: 1 Optimization Report

2. Pro Forma Report
Writings distributed for discussion or consideration on this matter within 72 hours prior to the meeting, pursuant to Government Code § 54957.5, will be made available at the following link:
https://monterey.org/Submitted-Comments
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 10, Packet Page 17

OPTIMIZATION REPORT
PREPARED FOR: THE CITY OF MONTEREY, CA
DRAFT REPORT DELIVERY DATE: MAY 12, 2023

IMPROVING COMMUNITIES THROUGH SPORT

THIS PROJECT IS REPRESENTED BY

FOR MORE INFORMATION VISIT
WWW.SPORTSFACILITIES.COM
DRAFT
ATTACHMENT 1
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 11, Packet Page 18 2 TABLE OF CONTENTS
2 EXECUTIVE SUMMARY 3
INTRODUCTION 7
PROCESS AND WORK COMPLETED 10
MARKET OVERVIEW 11
KEY DATA: DEMOGRAPHIC & SOCIOECONOMIC

ANALYSIS
12 KEY DATA: FITNESS IN THE REGION 14
NATIONAL FITNESS TRENDS 16
KEY DATA: EXISTING SERVICE PROVIDERS 18

ORGANIZATIONAL ANALYSIS AND

RECOMMENDATIONS
23 BUSINESS DEVELOPMENT 28
OPERATIONAL PROCESSES AND SYSTEMS 31
HISTORICAL FINANCIAL REVIEW 37
SURVEY RESPONSE ANALYSIS 42
PROGRAM REVIEW 45
PHYSICAL COMPLEX/FACILITY 53
FINANCIAL ANALYSIS AND FIVE-YEAR OUTLOOK 55
IMPLEMENTATION OVERVIEW 58
CONCLUSION & NEXT STEPS 64
THE SPORTS FACILITIES COMPANIES MISSION 65
ABOUT THE SPORTS FACILITIES COMPANIES 66
THE SF NETWORK 67
APPENDIX 69
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 12, Packet Page 19 3 DEFINITIONS OF SUCCESS
In June of 2022, the City of Monterey, California engaged Sports Facilities Advisory (SFA) to analyze the current performance and provide recommendations for the optimization of the Monterey Sports Center. This document provides a summary of the work completed to date, strategic recommendations, and the next steps that SFA proposes that the City of Monterey implement to achieve greater performance and operational efficiencies, therefore reducing annual dependency on General Fund revenues.

In order to understand the Client’s desired outcomes, SFA facilitated a planning and strategy session with leaders from the City of Monterey and MSC staff (henceforth the “Project Team”) to determine the definitions of success for the future of the Monterey Sports Center. As a result of on that exercise, SFA and the Project Team determined that this optimization initiative must achieve the following operational and organizational criteria to be deemed successful:
§ Ensure that the Monterey Sports Center provides first-class customer fitness, wellness, and recreation experiences, while embracing community diversity through accessible, affordable membership options.
§ Develop strategies that will embrace existing and new opportunities to enable the Monterey Sports Center to continue to be the area’s leader for fitness and wellness. § Implement strategies to improve the financial performance of the Monterey Sports Center to reduce reliance on the general fund, while diversifying and expanding revenue opportunities.

Based on the definitions of success outlined above, an analysis of the historical financials, programs, and input derived from the community survey, SFA created recommendations to create operational efficiencies, improve program performance, and expand opportunities to drive new and additional revenue.

EXECUTIVE SUMMARY
3 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 13, Packet Page 20 44 RECOMMENDATIONS FOR NEXT STEPS
The Monterey Sports Center has been the leader for fitness and wellness in a competitive market for 30 years.

The facility and staff pride themselves in creating first-class customer experiences and fostering community that differentiates it from other offerings in the area. SFA believes that there is an opportunity for the Monterey Sports Center to continue to be the area's leader for fitness, wellness, and recreation, while improving the financial performance to reduce reliance on the general fund and diversify opportunities for additional revenue. Whereas the Sports Center recovered 78% of its operating costs in 2018, the recommendations provided in this report will help to drive operational cost recovery to over 85% in the next 5-years.

It is important to note that the recommendations included in this report contain specific items associated with operational performance, such as programming, pricing, and cost containment, as well as reconfiguring and realigning staff positions to enhance program development associated with participation and revenue growth.

The implementation timeline will allow the City of Monterey the opportunity to assess the net benefits of each recommendation and determine appropriate actions and allocations within the financial, organizational, and operational capacity of the city.

PRIMARY RECOMMENDATIONS – NEXT STEPS
§ Conduct annual pricing analysis to assess and align all membership categories and programs to be market comparable and competitive.
§ Convert all membership categories to auto-debit/ACH with 30-day cancellation policy. § Assess and align program pricing to recovery 85% or greater of Sports Center operations expenses. The included pro forma documents provide additional details regarding potential reduction in subsidy associated with revenue and program growth noted in this report.
§ Expand targeted marketing to attract and increase membership of Gen Z and Millennials (15-34). Continue to grow membership to reach 2018 and 2019 membership levels. § Continue to implement and assess SmartRec system to ensure accurate membership reporting, membership retention, and customer satisfaction through personalized outbound communication, surveys, etc. Utilize financial components of SmartRec to stay abreast of real-time data regarding revenue recognition. § Contain costs associated with custodial/facility attendance, fitness instructors, and fitness equipment by exploring third-party contract services/equipment lease programs. § Expand operations, including operating hours, through the development of specific positions to grow marketing and member retention, fitness and recreation programs, and customer/member service. § Expand secondary revenue through dedicated third-party medical/wellness lease space, advertising, and vending.

DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 14, Packet Page 21 55 FINANCIAL ANALYSIS AND STRATEGIC FORECAST
As demonstrated in the charts below, MSC’s cost recovery has decreased from 78% in FY19-20 to a projected 50% in FY22-23. The operating subsidy has grown from $1,255,665 in FY19-20 to $2,543,151 in FY22-23 (before bond payment and capital). However, revenue for the current fiscal year (YTD FY22-23) has been growing strongly and has reached $2,361,513, which is 94% of the projected budget revenue and represents a 65% cost recovery rate. There are still two full months remaining in the budget year.

Working with the Project Team and utilizing real-time strategies for best practices for revenue generation backed by SFA’s operational expertise and real-world financial data from over 700 facilities across the country, SFA evaluated revenue potential, identified opportunities, and set targets to increase revenue over the next five years. The primary drivers for revenue growth are:

1. Participation growth

2. Fee increases

3. New revenue opportunities
78%
62%
36%
55%
50%
20%
30%
40%
50%
60%
70%
80%
90%
2019 2020 2021 2022 FY22-23

AMENDED
BUDGET
Monterey Sports Center
Historical Cost Recovery
Actual 2019 Actual 2020 Actual 2021 Actual 2022 FY22-23 Amended Budget
Revenue $4,477,806.17 $3,507,070.27 $635,929.36 $2,039,433.94 $2,511,752.15 Expenses $5,733,472.00 $5,612,231.35 $1,752,614.78 $3,486,335.15 $5,054,904.07 $-
$1,000,000.00
$2,000,000.00
$3,000,000.00
$4,000,000.00
$5,000,000.00
$6,000,000.00
$7,000,000.00
Monterey Sports Center Historical Financials:

FY19-20 to FY22-23
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 15, Packet Page 22 66 FINANCIAL ANALYSIS AND STRATEGIC FORECAST (CONTINUED) Utilizing these strategies, in addition to cost containment and employee retention, SFA’s projection of MSC’s financial performance in FY22-23 versus FY27-28 results in an operational cost recovery of 94% and a general fund subsidy of $348,460 (including bond payment and capital replacement). The charts below details the cost recovery growth from YR1 – YR5 as compared to the historical cost recovery. It is important to note that the FY22-23 Cost Recovery is based on amended budget. Year-to-date cost recovery is 65% and has exceeded the amended budget projections.

Throughout this analysis, SFA addressed the need to reduce the financial gap of the MSC to “Pre-Covid” performance levels, presented recommendations to maintain access to high-impact participative programs, and suggested adjustments to enhance the reputation of the MSC as the area’s leader for fitness and wellness. 78%
62%
36%
55%
50%
82%
90%
94%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2019 2020 2021 2022 FY22-23

AMENDED
BUDGET

SFA YEAR
1 SFA YEAR
3 SFA YEAR
5 Cost Recovery - SFC PF
Existing Staff Model
Actual 2019 Actual 2020 Actual 2021 2022
FY22-23
Amended
Budget
SFA Year 1 SFA Year 3 SFA Year 5
Revenue $4,477,806.17 $3,507,070.27 $635,929.36 $2,039,433.94 $2,511,752.15 $4,507,950.00 $5,259,863.00 $5,885,483.00 Expenses $5,733,472.00 $5,612,231.35 $1,752,614.78 $3,486,335.15 $5,054,904.07 $5,483,161.00 $5,843,323.00 $6,233,943.00 $-
$1,000,000.00
$2,000,000.00
$3,000,000.00
$4,000,000.00
$5,000,000.00
$6,000,000.00
$7,000,000.00
Revenue & Expenses - SFC PF -Existing Staff Model
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 16, Packet Page 23 7 In June of 2022, the City of Monterey, California engaged Sports Facilities Advisory (SFA) to analyze the current performance and provide recommendations for the optimization of the Monterey Sports Center. This document provides a summary of the work completed to date, strategic recommendations, and the next steps that SFA proposes that the City of Monterey implement to achieve greater performance and operational efficiencies to reduce annual dependency on General Fund revenues.

DEFINITIONS OF SUCCESS
In order to understand the Client’s desired outcomes, SFA facilitated a planning and strategy session with leaders from the City of Monterey and MSC staff (henceforth the “Project Team”) to determine the definitions of success for the future of the Monterey Sports Center. As a result of on that exercise, SFA and the Project Team determined that this optimization initiative must achieve the following operational and organizational criteria to be deemed successful:
§ Ensure that the Monterey Sports Center provides first-class customer fitness, wellness, and recreation experiences, while embracing community diversity through affordable membership options. § Develop strategies that will embrace existing and new opportunities to enable the Monterey Sports Center to continue to be the area’s leader for fitness and wellness. § Implement strategies to improve the financial performance of the Monterey Sports Center to reduce reliance on the general fund, while diversifying and expanding revenue opportunities.

INTRODUCTION
IMAGE
7 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 17, Packet Page 24 8 THE FULL SCOPE OF PHASE I OUTLINED IN THE AGREEMENT CONSISTS OF THE FOLLOWING SEVEN (7) STEPS:
§ Step 1: Project Kick-Off Call
§ In this step, SFA facilitated an initial phone call to cover six topics such as project history, existing data, potential partners, etc.
§ Step 2: Existing Data Review and Market Analysis
§ SFA requested and analyzed a myriad of existing data, including but note limited to historic and forecasted financial performance, program schedules and service offerings, membership and program participation reports. SFA also conducted market research to determine key influential factors including but not limited to:
§ Local demographics and socioeconomic data
§ Participation rates
§ Existing service providers in and around Monterey, CA § Program offerings and prices
§ Step 3: Development Planning Session (DPS)
§ In July 2022, SFA traveled to Monterey to facilitate a “deep dive” planning and strategy session with the Project Team that focused:
§ Defining success and refining the Client’s vision and goals for the MSC § Determining levels of service and value propositions
§ Identifying financial resources, core competencies, products and services, strategic alliances, and financial success metrics.
§ SFA also toured the Monterey Sports Center and conducted interviews with MSC staff, stakeholders, and user groups.
§ Step 4: Member and Community Online Survey
§ SFA developed, deployed, and analyzed the results of an online community survey that focused on current users, past users, and non-users to obtain opinions and data related to:
§ Past use
§ Perceptions of the Sports Center, as well as perceptions and use of other facilities in the market
§ Likelihood or participating in existing and/or new programs § Facility amenities and/or preferences
§ Pricing insights and opinions
§ Desired programs, classes, community functions, etc.

INTRODUCTION

SCOPE OF WORK
8 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 18, Packet Page 25 9 THE FULL SCOPE OF PHASE I OUTLINED IN THE AGREEMENT CONSISTS OF THE FOLLOWING SEVEN (7) STEPS:
§ Step 5: Detailed Optimization Report
§ In this step, SFA delivered an executive-level summary narrative report, including historical financial performance insights, strategies and recommendations for the following areas:
organizational development, business development, operational processes and systems, programming review, financial performance, and physical complex/facility. The strategies, recommendations, and financial forecast have been revied the the Project Team and deemed achievable by the MSC leadership team.
§ Step 6: Detailed Financial Forecast (Pro Forma)
§ Utilizing a combination of historic data, the current (2022-2023) annual budget, market/operations-based strategies, industry financial performance benchmarks/key performance indicators, and in-depth financial analyses, SFA developed a 5-year cash flow forecast and 20-year financial outlook for the Monterey Sports Center. This pro forma was reviewed by the Project team and includes projections related to the revenues and expenses by program, EBITDA, net income, facility utilization and more. The final pro forma submitted to the Project team reflects the business model and specific insights noted by the Project Team. § Step 7: Detailed Optimization Timeline
§ SFA has provided a detailed development timeline documenting the strategies and tactical action steps to be taken to develop the operation and see it to optimal operational success.

This timeline includes existing priorities and processes identified by the City of Monterey Project Team.

INTRODUCTION

SCOPE OF WORK
9 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 19, Packet Page 26 10 OUTLINE OF PROCESS USED TO FORM

RECOMMENDATIONS
In order to create the recommendations detailed in this report, SFA utilized a proven process to develop an indepth understanding of goals, opportunities, and viable strategies for improving the financial and operational
performance of the Monterey Sports Center While the
process included dozens of steps and was not linear, it can be summarized as a six-phase process that begins with
developing a contextual understanding of desired
outcomes and ends with recommendations to achieve
those outcomes. The “SFA Funnel Model” demonstrates
SFA’s process to develop and refine recommendations for the Monterey Sports Center.

PROCESS & WORK COMPLETED

OUTLINE OF WORK PERFORMED

IN ORDER TO COMPLETE ITS WORK, SFA
PERFORMED THE FOLLOWING STEPS:
§ Reviewed existing data, including:
§ Monterey Annual ACFR
§ Historical MSC financial report
§ MSC promotional and marketing materials
§ Monterey Parks Master Plan
§ And more
§ Conducted a market analysis, including:
§ Demographics and socioeconomics
§ Sports participation
§ Fitness industry, participation, and
competition trends
§ Researched existing local fitness/training
assets including:
§ Facility amenities
§ Facility quality
§ Membership categories
§ Pricing
§ Programs and classes
§ Conducted in-person, telephone, and Zoom
stakeholder and user engagement meetings
§ Facilitated follow-ups with staff members and
community stakeholders to clarify information
and gather additional insights
§ Developed, conducted, and analyzed a Sports
Center Community Survey
§ Engaged a team of subject matter experts and
industry partners to provide department-level
insights and recommendations for operations
§ Created initial recommendations for
optimization
§ Developed a pro forma based on
recommendations
§ Revised pro forma and recommendations based
on additional information provided by Monterey
Project Team
§ Delivered updated recommendations, pro form/
and five-year financial outlooked based on the
detailed financial analysis/forecasts, and
optimization implementation timeline
10 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 20, Packet Page 27 11 Throughout the analytical process SFA relies on location-related market data to help inform the recommendations. As directed by the Client, SFA explored and reviewed market conditions throughout the Monterey market.

The City of Monterey sits within Monterey County in the central coast of California. The City occupies 8.65 square miles of land and adjoins Monterey Bay to the north. Over 30,000 residents call Monterey home, along with numerous businesses. Monterey and neighboring central California coast cities benefit from California State Route 1 (Cabrillo Highway) that connects the area to regional population hubs like San Jose and San
Francisco. Monterey is home to the Community Hospital of the Monterey Peninsula, the Naval Postgraduate School, CTB-Mc Graw Hill LLC, and more.

SFA has provided a thorough review of demographic and
socioeconomic characteristics, sports participation trends, and existing service providers in the Monterey market within the corresponding sections of this report.

IMAGE
IMAGE
11 MARKET OVERVIEW
Monterey, California
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 21, Packet Page 28 12 SFA conducted an in-depth demographic and socioeconomic analysis of the local, sub-regional, and regional market. The goal of this portion of the analysis is to determine the key characteristics of the most regular users of new facilities and existing facilities during non-tournament and event times. SFA also determined the characteristics of those users who would participate in tournaments and events in Monterey, California. SFA has included comprehensive local and regional demographic reports in the Appendix of this document.

The chart that follows displays some of the key demographic factors used in analyzing the utilization of facilities by the local and sub-regional population; these customers are the most frequent/regular users of a fitness facility.

Should the Monterey Sports center decide to host any sub-regional or regional competitions, users may be derived from the sub-regional and/or regional population. While these statistics do not serve as strict predictors of a facility’s opportunity to meet its objectives, SFA has developed a proprietary analytical process which considers these factors and several others as an integral part of the financial forecast, sports participation projections, and other analyses required in SFA’s study.

KEY DATA: DEMOGRAPHIC & SOCIOECONOMIC ANALYSIS
12 KEY LOCAL, SUB-REGIONAL, AND REGIONAL DEMOGRAPHIC FACTORS Category 10 Minutes
(Local)
15 Minutes
(Local)
30 Minutes
(Local)
60 Minutes
(Sub-Regional)
90 Minutes
(Sub-Regional)
240 Minutes
(Regional)
Total Population 73,110 114,442 250,932 849,504 2,720,262 16,256,543 Projected 5-Year
Population Growth -0.30% +0.40% +0.60% -1.00% -1.05% 0.00% Median Age (U.S. Median:

38.5) 39.4 38.7 36.6 35.2 37.5 37.1
Median Household Income
(U.S. Median: $70,784) $93,403 $93,631 $88,243 94,283 $126,081 $97,133 Fees for Recreational
Lessons $209.85 $210.62 $203.79 $226.28 $312.28 $235.00 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 22, Packet Page 29 13 POPULATION SIZE:

SFA uses drive times from the potential facility site
to analyze the population of the possible
participants that a sports complex would seek to
capture. The immediate area, within the 15-minute
drive-time window, is made up of approximately
114,442 people, while the overall region (240
minutes) is made up of approximately 16.3 million
people.

The local market population can be viewed as a
positive factor for local and weekday programming.

SFA recognizes the central location of the Monterey
Sports Center within the City of Monterey and
adjacent to various moderately-populated suburbs
and acknowledges this factor as a positive as a
potential regional destination. However, due to the
Monterey Sports Center’s business model, the
regional population is less influential on day-to-day
business operations.

POPULATION TREND:

According to SFA’s data source, the population is
expected to slightly decline and slightly decrease in
the immediate area, with estimates of a .30-percent
decrease in the 10-minute drive time interval and up
to a .60-percent increase in the 30-minute drive time
interval.

AGE:

The median age within local drive time intervals is
both less than and greater than the national median
of approximately 38.5. Based on SFA’s experience,
markets with a below average median age typically
suggest that there are a high percent of children
and young adults in the market, which are key age
segments for sports and recreation.

Because the median age is higher than the national
median in all drive times, SFA views age as a
challenging factor in expanding membership.

MEDIAN HOUSEHOLD INCOME:

The median household income levels in the local drive
time intervals appear greater than the national median, which is approximately $70,784. SFA adjusted the median household income figures according to the cost of living in Monterey. These adjustments demonstrate that the
median household income in Monterey is between 25-
percent to 29-percent lower than the U.S. median within the 10 and 30-minute drive time intervals. SFA typically expects markets that have average to above-average
median household income levels to have the discretionary income to spend on sports and recreation.

AS A RESULT, SFA VIEWS MEDIAN HOUSEHOLD INCOME AS
A CHALLENGING FACTOR IFOR LOCAL PROGRAMMING.

FEES FOR RECREATIONAL LESSONS:

The surrounding communities have above average
spending on recreational lessons when compared to the
national average, which is approximately $143. Based on SFA’s experience, communities with above-average level
of household expenditures on fees for recreational lessons display the willingness to purchase recreation-based
programs and services in the immediate area.

Because fees (spending) for recreational lessons are
greater than average, SFA views spending on recreation
as a positive factor for the local programming at the
Monterey Sports Center.
13 KEY DATA: DEMOGRAPHIC & SOCIOECONOMIC ANALYSIS
-1.50%
-1.00%
-0.50%

0.00%

0.50%

1.00%
10 MINUTE
DRIVE
TIME
15 MINUTE
DRIVE
TIME
30 MINUTE
DRIVE
TIME
60 MINUTE
DRIVE
TIME
90 MINUTE
DRIVE
TIME
240
MINUTE
DRIVE
TIME
Five-Year Population Trend
Trend Rate
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 23, Packet Page 30 14 Within the local Monterey Sports Center market (up to 30-minute drive time), the population is approximately 250,932, however the market size expands to over 800,000 within a 60-minute drive time. Noting the location of the City of Monterey and the close-proximity to other population centers, the programs, and events of the Monterey Sports Center may expand beyond the local market.

Population age is slightly higher than the U.S median and may indicate an older population. While seniors typically account for less than 10% of health club members in the United States, the availability of programming for all ages and abilities at the Monterey Sports Center provides for multi-generational opportunities.

Noting that the amount paid by participants for sport specific lessons is greater than the national average, it will be essential to price the programs, memberships, and classes at the Monterey Sports Center within a range that is competitive in the market, but also will help to achieve the goals of serving citizens and visitors of all income and skill levels.

KEY DATA: DEMOGRAPHIC & SOCIOECONOMIC INSIGHTS
As part of the process of analyzing and making recommendations to optimized the Monterey Sports Center, SFA determined the total number of fitness participants in the local market.

SFA calculates sports participation using a blend of national and regional sports participation rates as reported by the National Sporting Goods Association (NSGA) and the Sports and Fitness Industry Association (SFIA). The projections consider only active sports participants who play their respective sport in an organized format a specific number of times per year. The qualifying participation threshold varies by sport and is intended to separate casual participants from core participants; core participants are more likely to be customers at the facility because they play consistently enough to consider paying for and participating in an organized program on a regular basis.

The following table lists the “primary” fitness activities that either take place or may be expanded within the facility that most regularly drive a high volume and frequency of participants and events, as well as the number of potential participants that could be attracted from the local marketplace. The qualifying participation threshold varies by fitness activity and is intended to separate casual participants from regular or core participants.

KEY DATA: FITNESS IN THE REGION
14 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 24, Packet Page 31 15 KEY DATA: FITNESS IN THE REGION

POTENTIAL CORE SPORTS PARTICIPANTS
Fitness Activity Core Participation
Rate
10 min.

Participants
15 min.

Participants
30min.

Participants
Barre 33.41% 24,426 38,238 82,836
Tai Chi 21.48% 15,704 24,582 53,900
Boot Camp 16.70% 12,209 19,112 41,906
Cardio Kickboxing 15.82% 11,566 18,105 39,697
Aquatic Exercise 11.56% 8,452 13,229 29,008
Stationary Cycling 10.37% 7,582 11,868 26,022
Pilates 9.40% 6,872 10,758 23,588
Rowing Machine 6.54% 4,781 7,485 16,411
Kettlebells 5.37% 3,926 6,146 13,475
Cross-Training 5.27% 3,853 6,031 13,224
Fitness Swimming 3.90% 2,851 4,463 9,786
Dance, Step 3.54% 2,588 4,051 8,883
SFA calculates the potential participants by multiplying each primary sport’s core participation rate with each drive time population. SFA notes that this calculation does not factor in existing service providers.

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15 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 25, Packet Page 32 16 KEY DATA: NATIONAL FITNESS TRENDS
As detailed in the “Program and Financial Analysis” section of this report, SFA recognized that membershipbased fitness (including swimming) as a tope priority for MSC to increase revenue and close the financial gap.

Long-term positive trends in the fitness industry as a whole support that assessment, and several additional industry data points reveal categorical and programmatic strategies that will help MSC maximize its fitness-base membership programs.

To collect data and assess fitness opportunities, SFA analyzed fitness industry trends on a national level to understand the current state of the industry. SFA analyzed annual membership trends, participation rates for different sport and fitness activities, and fitness program trends.

The following chart displays the total number memberships at fitness and health clubs from 2000 to 2019 to demonstrate a “pre-Covid” view of membership trends. “Post-Covid” trends are yet to be determined; 2020 and 2021 were significantly impacted by pandemic-related policies and closures, and industry data from 2022 has not been published as of the time of this report. That said, SFA has seen a rebound in its managed facilities and in client venues, and informed industry expectations point to a return to the pre-Covid trendline. .

As demonstrated in 2019, there were a total of approximately 64.2 million total memberships at fitness centers and health clubs in the United States. This number represents an increase of approximately 4.1 percent from 2015, with a three-year average annual growth of 2.7 percent. The total number of memberships at fitness and health centers has increased annually from 2012 to 2019. However, fitness clubs nationally experienced temporary and permanent changes to expected memberships due to the Covid-19 pandemic. According to the Statista and other sources, slowed population growth, fitness club closures, staffing shortages, and changes in consumer behavior have all affected the current decrease in overall fitness memberships in the period between March of 2020 and the present.
16 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 26, Packet Page 33 17 KEY DATA: NATIONAL FITNESS TRENDS
.
17 SFA researched national participation rates for fitness and sports categories. The chart above displays participation rate trends for individuals six and older across various fitness and sport categories.

As the chart displays, fitness sports participation rates for individuals ages six and older is highest among all other sports categories. Total participation in fitness sports was approximately 67-percent in 2020. The fitness industry is currently growing with the total number of memberships at fitness and health clubs increasing annually over the past four years, with the impact from the Covid-19 pandemic still to be fully determined in the years to come. The participation rates for fitness sports are highest amongst other sports categories.

After understanding national programmatic trends among core participants, SFA used survey data from the American College of Sports Medicine (AMCS) Health & Fitness Journal from December of 2017 to understand the industry’s top fitness program trends. The top fitness trends AMSC identified are below:

1. Wearable Technology

2. Home Exercise Gyms

3. Outdoor Activities

4. Strength Training with Free Weights

5. Exercise for Weight Loss

6. Personal Training

7. High Intensity Interval Training (HIIT)

8. Body Weight Training

9. Online Live and On-Demand Exercise Classes

10. Health/Wellness Coaching
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 27, Packet Page 34 KEY DATA: EXISTING SERVICE PROVIDERS - LOCAL
Based on the desire of the Client to optimize
financial and operational performance of the
Monterey Sports Center, SFA reviewed
existing service providers in the market. SFA
analyzes specific asset types based on the
Client’s vision and direction for the facility. In
addition, SFA conducts a standard review of
the market to identify additional areas of focus
for program growth in the market. SFA
researched the following asset types in the
greater Monterey area:

Court Facilities Indoor Aquatics Facilities Fitness-YMCA Facilities Day and Summer Camp Providers 0 5
10 15
20 25
30 35
40 EXISTING SERVICE PROVIDERS
100+

FACILITIES
§ INDOOR COURT FACILITIES
§ INDOOR AQUATICS FACILITIES
§ FITNESS-YMCA FACILITIES
§ DAY AND SUMMER CAMP PROVIDERS
1818
DRAFT
IMAGE
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 28, Packet Page 35 19 KEY DATA: EXISTING SERVICE PROVIDERS - LOCAL
The tables that follow show a sampling of the indoor court, indoor aquatic, fitness-YMCA, and day/summer camp facilities/providers by SFA. The following map demonstrates existing service providers in the market identified by SFA as having similar assets or program offerings to the Monterey Sports Center. SFA utilized a pinpoint black dot to represent the Monterey Sports Center. The map shows a relatively even distribution of facilities located throughout Monterey. The multi-colored symbol demonstrates a facility that offers multiple asset types within one overall facility. SFA has included an expanded list of facilities analyzed in the local market in the Appendix.

Indoor Court Facilities
Drive
Time
(Minutes)
Monterey High School 4
Trinity Christian High School 4
Santa Catalina School 7
Fitness-YMCA Facilities
Drive
Time
(Minutes)
STRENGTH 2
YMCA of Monterey Peninsula 3
Anytime Fitness 3
Gold’s Gym 6
Richard Russel CrossFit Monterey Bay 6
In-Shape 9
Montage Wellness Center 10
Day and Summer Camp Providers
Drive
Time
(Minutes)
YMCA of Monterey Peninsula 3
Lyceum of Monterey County 4
Pacific Grove Community Center 8
Tumble by the Sea 9
Oldemeyer Center (Seaside) 10
Carmel Youth Center 11
19 IMAGE
Indoor Aquatic Facilities
Drive
Time
(Minutes)
Kernes Adaptive Aquatics 7
Monterey Aquatic Therapy Center 8
In-Shape 9
Patullo Swim Center 10
DRAFT
Salina Community YMCA 28
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 29, Packet Page 36 20 KEY DATA: EXISTING SERVICE PROVIDERS – PRICING
SFA also conducted pricing research with detail required for a financial forecast to determine the impact of competing facilities on the ability of the Monterey Sports Center to achieve operational success. The facilities researched represent potential competitors in the market that are currently hosting programs, tournaments, or other events that may impact the operations at the Monterey Sports Center 20 Facility Name Membership Type Price Package Notes
Monterey Sports Center Monthly & Annual
Memberships
Month to Month
Youth $34
Teen $37
Adult $61
Senior $45
Family $87
1 Year Paid in Full
Youth $371
Teen $408
Adult $668
Senior $493
Family $957
Corporate $586
(Monterey Residents
receive 10% discount)
Includes drop-in, group fitness,
personal training, fitness areas,
gymnasium, aquatics, saunas, and
sun deck. Memberships include
annual and month-to-month with
autopay.

Anytime Fitness Annual Adult Membership $50.00/Month
Includes 24/7 access, cardio, strength
equipment, functional training, and
more
Montage Wellness
Center Monthly Membership $78.50/monthly ; $250 initiation fee Cardio and strength training
equipment, Group fitness classes,
aquatics, massage therapy, personal
training, skin care services (facials and
waxes), therapy and rehabilitation
programs, whirlpool and steam
Gold's Gym Monterey Monthly/Annual
Membership
Month to Month:
$46.99 / month
$49 enrollment + $69
processing fee $45
annual fee
1 Year-Paid in Full:
$561
24 Month
Membership:
$36.99/month
$69 processing fee +
$45 annual fee
Cardio equipment, group exercise,
personal training, pro shop, group
cycle, functional training, free
weights, locker rooms, wifi
In-Shape Monterey Monthly Membership
Core: $32.99/monthly
Local (Monterey Bay):
$39.99/month
Local Network
(Monterey Bay):
$44.99/month
Senior Membership:
20% off monthly dues
Corporate
partnerships available
Group fitness, aquatics, free weights,
cardio theater, 360FIT, Tennis,
pickleball, racquetball, courts; saunas,
steam rooms, Hydromassage beds,
KidZone: 6 months-12 y/o; Trustline
Registered staff, age separation
(membership required)
Chamisal Tennis &
Fitness Club Monthly Membership
Fitness Membership:
$135/month
Tennis Membership:
$170/month
2 outdoor swimming pools, 2 hot
therapy pools, Matrix Strength
Training and Cardio Equipment, free
weights, group fitness classes, full
service tennis and health club, 2
bocce all lanes, outdoor firepits;
13 championship tennis courts, 11
lighted courts, 1 stadium center court
Carmel Valley Athletic
Club Monthly Membership N/A
Group Exercise, Aquatics,, Family &
Adult Hot Tubs, Sauna & Steam
Shower, Bocce Ball Court, Café,
Relaxation Spa, 10 lighted tennis
courts, 2 pickleball courts,
Personal training
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 30, Packet Page 37 KEY DATA: EXISTING SERVICE PROVIDERS
SFA conducted additional analyses during the pro forma development to determine each competing facility’s effect on the ability of new fitness programs and assets to achieve operational success. The facilities researched represent potential competitors in the market that are currently hosting fitness or aquatics programs, or other events that may impact the operations of the Monterey Sports Center.

The factor SFA used to perform this analysis include, but are not limited to:

EXISTING SPORTS AND RECREATION INVENTORY:

SFA analyzes existing facility inventory in terms of the quantity of existing sports assets, the quality of those assets, and their proximity to critical supporting structures and businesses.

PROXIMITY TO THE FACILITY:

SFA determines the proximity of existing sports and fitness assets to the Monterey Sports Center, recognizing that closer assets will have a larger impact from a competitive standpoint than assets that are farther away.

PRICING:

SFA examines the market prices of user fees, rental rates, registration fees, etc. As directed by the Monterey Project Team, the prices set in year one of the pro forma reflect current program and membership prices.

SEASONALITY:

SFA utilizes its experience in managing similar facilities to determine the optimized seasonality for hosting programs and events.

MARKETING REACH AND CAPTURE RATE:

SFA bases the ability of a facility to effectively market and capture sports and fitness participants and events on market factors such as demographics and socioeconomics, competitive factors such as the quality of existing facilities in the region, and destination factors such as site accessibility and the reputation of the destination.

PROGRAM MIX AND SERVICE OFFERINGS:

SFA creates a financial forecast that reflects a robust, detailed set of revenue streams for the facility based on the type, size, quantity, and quality of assets.
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Council Special Meeting, 5/24/2023, Item No. 2., Item Page 31, Packet Page 38 22 KEY DATA: EXISTING SERVICE PROVIDERS
KEY INSIGHTS:
§ The market for fitness facilities within the greater Monterey area is highly-saturated and includes public and membership-based fitness and wellness facilities. While smaller-sized boutique fitness facilities exist and provide niche programs and services to specific users, large competitor facilities, with assets similar to the Monterey Sports Center (cardio and weight equipment, fitness classes, indoor aquatics, and court sports) provide a direct impact of potential membership recruitment and retention. § The presence of five indoor court facilities within 10-minutes of the Monterey Sports Center may factor into the number of players that the MSC can expect to register for basketball programs. Factors such as availability of coaches, popularity of basketball and other court-based sports, and the quality of the program can also play a role in determining league and program participation.
§ The 10-minute and 15-minute drive-time population can support aquatic usage. Monterey’s higher than average population of 65+ correlates to increase programming for aquatic fitness and therapy. Area aquatics providers may reduce participation levels at the Monterey Sports Center. The presence of over 4,000 children under the age of 14 is a positive factor for swimming lessons. 22 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 32, Packet Page 39 23 FACILITY MANAGEMENT AND STAFFING
The review of the information provided by the Monterey Sports Center team, discussions with key staff, market analysis, and industry benchmarks/key performance indicators, has allowed SFA to recognize various attributes of the facility that are performing well and others that may have opportunities to perform better.

The following section outlines SFA’s recommendations related to the optimization of the Monterey Sports Center operations to strengthen organizational characteristics and functions.

MANAGEMENT STRUCTURE
SFA completed a review of the organizational structure provided by Monterey Sports Center staff. SFA focused on recommendations specifically related to MSC facility and program operations, with specific focus on positions that impact membership and customer service, improve operational efficiencies, and provide first-class of service.
§ SFA noted that the existing management structure within MSC includes 6 full-time positions (not including the percentage of salary/time associated with the Director of Parks and Recreation). These positions are Sports Center Manager, Aquatics Coordinator, Fitness Supervisor, Sports Coordinator, Facility Coordinator, and Administrative Assistant. These positions are supplemented with numerous part-time temporary positions, which support programs and operations. Part-time temporary positions include lifeguards, custodial staff, and front desk staff. Based on the existing number of programs and membership, SFA recommends expanding full-time positions to coordinate and support expanding programs and services. The following positions are recommended for consideration by the city, if and when the city has capacity to add these positions. § Assistant Sports Center Manager - Operations
§ SFA recommends expanding the full-time staff to include an Assistant Sports Center Manager that will focus on Operations. This position would manage all contractual relationships relating to the Monterey Sports Center, coordinate all maintenance work and staff to properly maintain and repair the facility, maintain all maintenance records, serve as manager on duty in the absence of the Center Manager, assist with preparation of operating and capital budget requests, and interact with members of the public, staff, and City Administration as required.

The salary range for this position would be higher than that of a coordinator and in-line with other assistant division managers within the city.
23 IMAGE
23 ORGANIZATIONAL ANALYSIS AND RECOMMENDATIONS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 33, Packet Page 40 24 FACILITY MANAGEMENT AND STAFFING
§ Front Desk Specialist
§ SFA recommends the addition of a full-time liaison to manage all front-desk operations, parttime temporary personnel associated with the front-desk, and direct service to customers. This position will support the Membership Coordinator to ensure that existing members are provided first-class service, ensure that new members receive accurate membership information and connect all new members to the Membership Coordinator. The salary range for this position would be in-line with other specialist positions and be a support position to the Membership Coordinator. While this position is recommended to improve customer service and membership retention, SFA understands that any new position will require appropriate and approved financial resources. The salary and associated expenses for this position have not been included in the final iteration of the pro forma but may be added by the City as resources allow.
§ Administrative Assistant
§ SFA explored the option of transitioning this position to part-time staff to reduce expenses associated with a fully burdened position, however, does not recommend this transition at this time to ensure consistency in operations. A transition of this nature may lead to a loss in productivity, increased administrative costs associated with hiring and training, difficulty in scheduling, and an increased risk of error, lack of continuity, knowledge, and consistency.

While analyzing the existing full-time positions within the Monterey Sports Center, SFA note potential to reclassify some existing position to expand the scope of responsibilities to create greater capacity to meet the optimization goals. These recommended reclassifications include:
§ Fitness Supervisor to Wellness Supervisor
§ SFA recommends reclassifying the Fitness Supervisor position to include a new title and responsibilities. This position, Wellness Coordinator, would retain the responsibility of oversight, scheduling, and managing all fitness related programs, but would also include the additional responsibilities of implementing wellness classes, speakers, seminars, etc., contracting with new group fitness instructors, and ensuring that class data is collected and analyzed to produce accurate class activity reports. This position will not have any primary teaching or instructing responsibilities but will fill-in as necessary, ensure that all instructors meet all conditions of contracts, maintain fitness certifications, and other requirements. The additional wellness programs will be an added benefit to new and existing members. This position would also act as a liaison and represent the Monterey Sports Center on various health and wellness committees and build collaborative partnerships with other wellness organizations in the Monterey area. SFA understands that any new position will require appropriate and approved financial resources. The salary and associated expenses for this position have not been included in the final iteration of the pro forma but may be added by the City as resources allow.
§ Facility Coordinator to Membership Coordinator
§ SFA recommends that the Facility Coordinator be reclassified to a position title of Membership Coordinator. This full-time position would focus on membership retention, engagement, growth, and recruitment through successfully developing and executing sales and marketing efforts. This position would have targeted monthly sales goals and be responsible for maintaining strategic relationships to expand all memberships including business and corporate sales. This position is also responsible for member engagement and promotional events that take place throughout the year.
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ORGANIZATIONAL ANALYSIS AND RECOMMENDATIONS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 34, Packet Page 41 25 FACILITY MANAGEMENT AND STAFFING
The following is a recommended organizational chart for the Monterey Sports Center noting the recommendations noted in this section. Positions noted within this section are highlighted with a star (*) before the position title.
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ORGANIZATIONAL ANALYSIS AND RECOMMENDATIONS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 35, Packet Page 42 26 PART-TME TEMPORARY STAFF AND CONTRACTS
SFA further analyzed the positions within the Monterey Sports Center and recommends the following part-time temporary positions, as well as contracts.

Part-Time Wellness Specialist
§ SFA recommends expanding the part-time staff to include a Group Exercise Specialist that will support the Wellness Coordinator. This position will be responsible assisting the Wellness Coordinator by maintaining the daily activities of all group exercise and fitness, assist to complete health assessments to determine member health and wellness needs, and assists with tracking attendance, participation, and performance data related to wellness programs and events. The salary range for this position would be in-line with other part-time specialist positions and be a support position to the Wellness Coordinator.

SFA also recommends transition to contract positions for group fitness instructors and custodial/facility attendant staff.

The benefits of moving to contract services include:

Cost Savings: Contracting services can be more cost-effective than hiring full or part-time staff, as contract services eliminates the need for benefits and other associated expenses (uniforms). § Instructors – Classes are currently being conducted by full-time and part-time staff. Expanding to contract staff could increase capacity of full-time staff to expand role and responsibility to focus on data analysis, implementing new classes, and developing a wellness component. Contract instructors may also bring a fresh perspective and new expertise to the Center.
§ Custodial/Facility Attendant – The current custodial/facility attendant schedule include 25+ part-time staff working a variety of overlapping 4-hour shifts to ensure coverage of the 152 weekly hours being scheduled in FY22/23. Based on the square footage of the building and to ensure proper cleanliness for highly utilized areas such as restrooms/locker rooms, the total number of hours of custodial work being performed by parttime facility attendants is within the range of 1 FTE per every 10,000-20,000 SF. Transitioning to contract custodial/facility attendants may contribute to lower personnel costs and decreased personnel issues, reduced on-boarding time and costs associated with new hires, requirements for the contractor to provide approved substitutes for absences, and may reduce overall expenses associated with chemical/cleaning product costs (if included in contract). SFA recommends referencing GSA National Custodial Specification Version 1.0 for a detailed list of the minimum standard of custodial work. SFA has considered expanded custodial hours in the proforma that reflects expanding the hours of operation. 26 IMAGE
26 ORGANIZATIONAL ANALYSIS AND RECOMMENDATIONS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 36, Packet Page 43 27 PART-TIME TEMPORARY STAFF AND CONTRACTS
Flexibility: Contracts can be tailored to meet specific needs and can be easily adjusted or terminated if necessary.
§ Instructors – A good mix of part-time and contract instructors will provide MSC with the consistency of regular instructors and the benefit of “specialty” instructors that provide a unique class/program during their predetermined availability. Contract instructors are also a great way of ensuring that the instructor teaches to the standards of the MSC and generates enough class participation to warrant continuing the class. It may be in the best interest of the MSC to transition a contract instructor to a part-time staff position if they meet certain conditions/number of classes.
§ Custodial/Facility Attendants – Contract custodial/facility attendants may be tailored to fit specific schedules or needs. MSC can determine the frequency and duration of the visits, as well as each of the types of services that would need to be included. This flexibility would allow MSC the customize custodial/facility attendant services that would work best for specific days, seasons (i.e. increased service during summer camp months), etc. SFA has provided MSC leadership with recommended custodial/facility attendant schedules to assist with the procurement of contract services.

Access to specialized skills: Contractors often have specialized skills and expertise that can be leverage for specific programs.
§ Instructors – Contract fitness instructors can provide specialized certifications in a variety of fitness disciplines, such as exercise instruction, yoga, Pilates,, etc. Having instructors with a variety of specialized certifications helps demonstrate expertise in the field of fitness and will help the MSC stand-out from other providers in the area.
§ Custodial/Facility Attendants – Contract custodial services can provide specialized certifications and skills in a variety of disciplines, such ass green cleaning and OSHA safety training. This will enable the contract to adhere to the highest standards of safety and cleanliness.

Scalability: Contracts can be easily scaled up or down depending on MSC needs, allowing for efficient use of resources.
§ Instructors – Contract fitness instructors are scalable in that they can easily adjust their services based on their availability and the needs of the client as the needs change. § Custodial/Facility Attendants – While modifications and changes to contracts for custodial services may require amendments, changes to increase or decrease service are scalable and should be considered at contract origination to ensure schedule changes with appropriate notice to the contractor.

Focusing on core activities: By outsourcing custodial and fitness instructors, the Monterey Sports Center can focus on its core business activities and achieve greater efficiency. § Contract services can enable the MSC to focus on core activities by freeing time and resources of the business to focus on other activities, such as programming, marketing, and member development and retention.
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ORGANIZATIONAL ANALYSIS AND RECOMMENDATIONS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 37, Packet Page 44 28 Within the industry, the marketing manager/coordinator is typically present in all aspects of the operation. They are involved in weekly meetings, all team communication streams, and physically present in the facility driving results. At the Monterey Sports Center, the marketing functions do not properly report within the Monterey Sports Center management structure. This has led to a disconnect between the shared marketing contributors for the City of Monterey and the Monterey Sports Center team members who are accountable for utilizing marketing efforts to produce results. Due to these reasons, SFA recommends a part-time marketing specialist that would report directly to the Membership Coordinator of the Monterey Sports Center and work hand in hand to improve the marketing efforts for the facility. Due to these reasons, SFA recommends aerating the part-time marketing specialist that works with the Sports Center Manager and all Coordinators to improve the marketing efforts for the facility.

SFA recommends that the Monterey Sports Center focus on each of the following industry best practices for marketing, including:
§ A dedicated marketing plan and budget for the facility. The Monterey Sports Center’s budget should include both general advertising dollars and program-specific advertising dollars. The general advertising budget should be increased but never decreased. That said, the program-specific marketing budgets may fluctuate up or down based on performance and variable expense targets. § An annual marketing plan for the Monterey Sports Center that creates a 12-month strategy for marketing focuses, scheduling, promotions, marketing channels/outlets, advertising partnerships, special events, etc. § A marketing action matrix updated on a bi-monthly or quarterly basis with tasks to be completed, personnel assigned to complete them, a budget for execution, deadlines for both implementation and completion. § A marketing effectiveness tracking system to improve marketing efforts and determine which marketing channels/outlets, programs, etc. are creating the highest number of impressions, generating the greatest number of memberships and program registrations, producing the best return on investment and effort, and those that are least effective and need to be either revamped or removed from the plan and budget. 28 IMAGE
28 BUSINESS DEVELOPMENT
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 38, Packet Page 45

BUSINESS DEVELOPMENT
SFA reviewed program lists, the Monterey Sports Center website, program and event calendars, and other marketing collateral and information related to the marketing and branding of the Monterey Sports Center and its product and service offerings.
§ Marketing
§ The City of Monterey marketing team is not directly plugged into the facility team because they divisions within separate departments. Therefore, they do not have the knowledge they need to accurately market the events, offerings, and overall awareness of the Monterey Sports Center. § Coordination and Collaboration with Museums and Culture Arts Commission to enhance the public arts program and build community connections between sport and art. § SFA recommends:
§ That the city marketing team meets with the Sports Center Manager or leadership of the Monterey Sports Center specifically on a bi-weekly basis. § Ensuring there are regular cross-functional meetings to stay ahead of upcoming events, activities, offerings, and more.
§ Creating a goal-oriented marketing plan that has strategic campaigns focused on driving revenue, continuing awareness, and reaching achievable goals. § Explore public art placement within publicly accessible areas in and around the Monterey Sports Center. Encourage collaboration with local art commission to highlight communitybased artist through specific mural, kinetic, and other forms of curated art. § Branding
§ The information and example collateral revealed that there are a variety of templates, designs, and initiatives happening simultaneously. There is a core brand that is being used but it is not modern or design friendly. The team expressed the need for structure and a standard operating procedure to ensure the brand keeps integrity across departments.
§ SFA recommends:
§ Creating a brand standard guide to roll out to the entire facility that is clear, concise, and easily forwarded.
§ Creating a system of templates and approval process to ensure that every design made is approved and matches the brand from the marketing team. § Setting expectations and communicating with the team what the goal of new standard operating procedures and brand standards guidelines is to ensure understanding and followthrough. 2929
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 39, Packet Page 46

BUSINESS DEVELOPMENT
§ Marketing Budget Allocations
§ It is SFA’s experience that the fitness and wellness industry has experienced a reduction in the effectiveness and return on investment on printed materials. Based on review of the marketing and industry expertise, SFA believes a realignment of the marketing budget to coincide with the retail sales potential for the Monterey Sports Center.
§ SFA Recommends:
§ Conducting a SWOT analysis of the marketing channels where the budget is spent to identify the best return on investment.
§ This may result in identifying budget allocations that are not delivering results and the need for adjustment to the spend in that category.
§ Putting together a case study of marketing best practices with examples of campaigns that have been successful using dollars focused on omni channels including a wide range of traditional and non-traditional channels.
§ Presenting the findings to Parks and Recreation leadership and City leadership with the intention of properly allocating resources to improve the return on investment. § Testing the shifted budget allocation for more variable spending to show key findings and results.
§ Digital Excellence
§ Digital marketing has been accepted as a more common and effective use of marketing dollars. It is important for organizations to reach a high level of digital acumen to attract audiences and effectively communicate their message. In the case of the Monterey Sports Center, the brand has only begun to scratch the surface of what can be achieved on the digital marketing front. It appears that this is because of a lack of investment in digital areas, restricted access to tools and functions on the website, and a lack of reporting.
§ SFA recommends:
§ Investing in digital marketing to find the best channels that work for the Monterey Sports Center brand.
§ Meeting with the City Leadership and agency partners to ensure the marketing team has proper training, access, and support from digital marketing vendors. § Creating consistency by making sure that messaging is running on schedule which includes creating calendars and execution timelines so that the entire team knows what to expect on the digital marketing channels you are using.
§ Measuring and reporting on the effectiveness of digital marketing channels to ensure knowledge of where traffic is being derived.
§ It is crucial to use tracking tools like Google Analytics, search engine optimization software, and reporting from social channels often to further understand performance. § Sharing performance and knowledge through monthly reports with leadership staff to show progress, transparency, and effectiveness of digital marketing spend. § Utilizing internal digital and static marketing and advertising to ensure that the programs and mission of the Monterey Sports Center are consistent and present to drive program participation.
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DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 40, Packet Page 47

OPERATIONAL PROCESSES AND SYSTEMS
The Monterey Sports Center team provided SFA with operational insights, a tour of the premises, safety procedures, facility rules, agreements describing services provided, and other information related to current services offered by the facility. SFA recommends the following best practices for enhancement to operations:
§ Developing dedicated budgets for each program and event § By developing specific program and event budgets, the MSC will be able to appropriately allocate staff, dedicate marketing efforts and ensure that appropriate marketing takes place for each program and event, and direct
other program/event expenses tied to each unit to track specific cost recovery targets by program.
§ Establish on-going customer feedback process, including online and CRM coordinated surveys, Net Promoter Score survey, and quarterly user group surveys
§ An ongoing customer feedback program will allow for
unsolicited feedback from customers/members, etc. and
allow the MSC to identify potential issues before they
become major concerns/problems. Through on-going
customer feedback, the MSC will be able to identify what members like and dislike about programs, facility,
staffing, and make changes accordingly. This will help
the MSC stay ahead of issues and ensure that members
are satisfied with their services. Additionally, on-going customer feedback can provide valuable insights into
member preferences and potential new trends in the
fitness industry and allow the MSC to make better
informed decision about new programs, services, and/or
events.
§ A semi-annual Net Promoter Score survey would enable
the MSC to measure member loyalty, identify member
issues, and track member satisfaction over time. The
survey will also enable the MSC to comp[are
performance to industry benchmarks, helping to identify areas for improvement and measure customer service
performance, helping the MSC to ensure that they are
meeting member/community expectations.

Utilizing the new CRM system to capacity and including member surveys will provide for a uniform and connected system of assessing customer satisfaction, potential issues or concerns, and help the MSC to optimize strategies to implement effective marketing campaigns and program initiatives.
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DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 41, Packet Page 48

OPERATIONAL PROCESSES AND SYSTEMS
§ Modifying the Facility Hours of Operations
§ By modifying and extending the facility hours of operation, the MSC will provide more options for member usage. Based on community responses to the survey and hours of operations for comparable facilities within the Monterey market, SFA recommends extending facility hours on a trial basis to determine level of use. While building modifications have been discussed throughout this process, SFA does not recommend engaging in any building modifications for 24-hour access at this time.

More data regarding facility use during proposed expanded hours should take place before any major facility investments to allow for 24-hour access. The following chart details the current and proposed hours of operations. SFA recommends evaluating the hours at 6-months to assess and compare member use to staff/ and facility expenses.
§ Restructure Child Watch, Restart on a Trial Basis, or Use Child Watch Space for Enhanced Programming § Restarting child watch for a limited number of hours each week on weekdays and weekends may accommodate the highest demands for members who would utilize or previously utilized this service.

Understanding that a small fee ($10R/15NR) would be required for child watch and that additional members may be generated if child watch services are available, the cost to operate child watch services is not expected to cover the cost of operations for this service. SFA recommends determining the highest hours of need for child watch through a survey of previous users and current members. A max of 30 total hours is recommended with a required preregistration system and a maximum allowable attendance of 2 hours per day. The Monterey Sports Center may want to consider including child watch as a benefit in the family memberships as a new membership category, as this may increase memberships to families that need childcare while participating in group fitness. In an effort to reduce potential liability associated with infant care, the ages recommended for child watch (ages 2 – 9) include toddlers and elementary school-ages children. SFA recommends referencing Title 22 of the California Administrative Code to ensure compliance with all childcare regulations and potential licensing exemptions. SFA recommends two staff to oversee the child watch area at all times. These staff may report to the Assistant Sports Center Manager, Wellness Supervisor, or other staff as MSC leadership deems appropriate.
3232
Days of the Week Current 22/23 Hours Total Hrs Proposed Total Hrs Sunday 8am - 4pm 8 8am - 6pm 10
Monday 5:30am - 8pm 14.5 5:30am - 9:30pm 16
Tuesday 5:30am - 8pm 14.5 5:30am - 9:30pm 16
Wednesday 5:30am - 8pm 14.5 5:30am - 9:30pm 16
Thursday 5:30am - 8pm 14.5 5:30am - 9:30pm 16
Friday 5:30am - 8pm 14.5 5:30am - 9:30pm 16
Saturday 8am - 4pm 8 8am - 6pm 10
Total 88.5 100
Monterey Sports Center Hours of Operation
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 42, Packet Page 49 OPERATIONAL PROCESSES AND SYSTEMS § Based on 2018 Child Watch attendance, the MSC may anticipate 30 participants each day depending on the hours of service each day. At a rate of $10/$15 R/NR this service could generate revenue between $50,000 – over $100,000, depending on participation. SFA recommends offering child watch as a member benefit to family memberships to drive the growth and competitive advantage of the MSC in the family membership market in the greater Monterey area. Utilizing 2 staff (which may at times be reduced to 1 staff with access to a communication system to the front desk/supervisors at all times), the MSC would need to acquire a total of 59 new family memberships on a 12-month basis to cover the expenses associated with staffing the child watch area. Importantly, SFA recognizes that one primary competitors has a lower membership and offers child watch as a member benefit, so charging on top of having a higher monthly fee is expected to have a negative impact on members decision to choose MSC over In-Shape. MSC may also use this space for other membership enhancing programs, such as ping-pong and teen space.
§ Gym Utilization
§ To enhance revenue generation and the opportunity to grow membership, the gym should expand program offerings to include adult leagues, such as basketball, pickleball, and other court-based sports such as badminton. Growing existing programs with the goal to increase team/participation numbers between 5% and 10% each year. More participants/teams can create more competitive matchups, increase sponsorship opportunities, and generate additional members. Expanding leagues and other court-based sport programs would be after camp and daytime programming. § Out of School Camps
§ In 2019 the average number of out of school camp participants, over the 15 weeks of camp offered, sports camp average 43 weekly participants, with 22 weekly participants adding swim to their camp experience. In 2022, sports camps averaged 71 weekly participants with 295 participants taking part in the early drop-off (138) or extended pick-up options (135). SFA recommends expanding into the 5- year-old camp market by adding a KinderCamp half-day (4 hours) option to the current camp schedule for a limited number of weeks (10). Including a camp option for 5-year-olds will enhance the opportunity for camper in this age group to socialize, increase physical activity, learn new educational activities, develop independence and self-confidence, and explore new interests that may lead then to a lifetime of involvement in physical activity in fitness. Camp for this age group may also enhance adult, youth, and family memberships. Revenue for out of school is current included in the Sports Center Program (3743) account which includes leagues, camps, and other programming and is expected to generate $242,329 in FY23. Increasing out of school camp participation within existing camps and adding a KinderCamp to the program offerings may yield revenue in excess of $220,000. 3333
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 43, Packet Page 50

OPERATIONAL PROCESSES AND SYSTEMS
§ Policies, Procedures, Membership Documents, etc.
§ SFA recommends reviewing all membership document annually to ensure legal compliance with current rules, regulations, and restrictions.
§ Membership Pricing
§ As noted in a previous section, membership pricing is in-line with competitors. SFA recommends that all memberships move to the auto-debit/ACH withdrawal with a 30-day cancellation notice. 34 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 44, Packet Page 51

OPERATIONAL PROCESSES AND SYSTEMS
Cost Containment
SFA was provided with expense data related to the Monterey Sports Center’s direct expenses and overhead expenses. As described in the financial performance overview, facility, and operating expenses as well as total payroll costs are higher than industry benchmarks. The Monterey Sports Center must balance cost reduction with delivering high-quality service to the members and facility user groups. In consideration of cost containment opportunities, SFA recommends that several important structures, policies, and procedures be implemented to align the facility with industry best practices, including:
§ Robust Cost of Goods Sold
§ Understanding and ensuring that the cost of goods sold are specific to each program and that all variable expenses for the business unit/program are included. Variable expenses should include staff, contract services, supplies, awards, program-specific marketing, and any other expenses that are specifically related to a single program.
§ Monthly Tracking of Expenses
§ Ensure accurate reporting of monthly expenses against revenue allows for real-time spending decisions to be made based upon timing, registration volume, and positive or negative variances in revenue from the budget. Monthly reporting will also help the MSC team to better plan and forecast future financial performance by providing a clear picture of how revenues and expenses compare to budgeted amounts and may be an early warning sign to detect potential financial problems. Currently these financials are produced through the City finance department and delivered to the facility. SFA recommends a more collaborative effort between MSC operations team and City finance to enable the MSC team to understand a clear and accurate picture of MSC performance. § Transparent Accounting of All Discounted Rates
§ All discounts need to be accurately reflected in profit and loss statements to understand bottom-line impact and the connection between the discount rate and the cost-recovery target. SFA recommends developing a policy for discounts and promotions that is clear to all staff, members, and facility users to ensure that discounts are monitored and recorded. SFA further recommends establishing each discount intentionally and on a calendar basis, targeting discounts to intended beneficiaries (i.e. new members, Veterans, etc.), and ensuring that the discount program has appropriate accountability and oversight.
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Council Special Meeting, 5/24/2023, Item No. 2., Item Page 45, Packet Page 52

OPERATIONAL PROCESSES AND SYSTEMS
Cost Containment
§ Third-Party/Outside Management
§ If profitability and/or operational performance progressively decline, SFA recommends exploring the potential benefits of third-party/outside management to assess reducing costs associated with labor and benefits, as well as the ability to shift resources to more cost-efficient options.

Financial Tracking and Reporting
SFA reviewed historic financial data for the Monterey Sports Center. This data included annual historic financial performance, annual budgets, annual budget versus actuals, and a breakdown of expenses. SFA generally found the accuracy of budgets, level of detail included in the expenses, and the consistency of reporting data to be satisfactory.

SFA recommends that these important structures, policies, and procedures be in place in accordance with industry best practices, and extend the access to these to more of the leadership team including department and program heads:
§ Budget Accountability
§ Furthering the recommendation for monthly reporting and accounting, SFA recommends that MSC leadership include program coordinators/supervisors in scheduled financial tracking and reforecasting exercises to ensure that the MSC budget is being used in a responsible and efficient manner.

Monitoring individual program area’s spending, comparing it to the budget, and making adjustments as necessary to stay within budget involve ownership on all levels of the organization. The ability for the leadership team within the MSC to review daily, weekly, monthly and quarterly budget documents, and meeting during regularly scheduled times, to assess actual and forecast amounts will keep staff engaged and aware of how their specific allocations are being used. Setting clear and specific budget expectations and accountability will further help develop the team at MSC. § Systems and Technology
§ The transition from Rectrac to Smartrec, powered by Amilia, has enabled the team to address previous functionality constraints, including recurring monthly billing. The Smartrec system will enable the MSC team to sell, process, and report programs, memberships, drop-ins, lessons, rentals, and merchandise, in addition to managing facility utilization schedules and avoid conflicts with program scheduling. SFA recommends that the MSC utilize all elements of the Smartrec technology including reporting and reconciliation functions, online program registration, facility access management and program tracking component, as well as self check-in kiosks to enhance operational efficiency and provide first-class service to members.
3636
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 46, Packet Page 53 SFA reviewed comprehensive historical financial data
from the Monterey Sports Center for the year 2017-
2022 and analyzed historical 2019 financial
performance as the most comparable year to the likely
future based on the impact the Covid-19 pandemic
had on operations. SFA derived various insights from
2021 and 2022 as indicators of Post-Covid
performance, constructed a summary of overall
financial data, and benchmarked facility revenue per
square foot by area/business unit, facility expenses,
and EBITDA.

HISTORICAL FINANCIAL REVIEW
3737

HISTORICAL FINANCIAL SUBSIDY TO

THE MONETERY SPORTS CENTER HAS
GROWN FY17-18 TO FY22-23 INPART

DUE TO INCREASED INTERNAL

SERVICE CHARGES
SFA formulated recommendations and insights based on the financial analysis. To accurately measure the Monterey Sports Center’s performance as compared to industry benchmarks, SFA reorganized and adjusted the financial information to better align with SFA’s standard structure. The table below shows a summary of the MSC financial performance for the years 2017-2021.

Revenue Fiscal 17-18 Fiscal 18-19 Fiscal 19-20 Fiscal 20-21 Fiscal 21-22 Budget 22-23 DAILY ADMISSIONS $0 $0 $0 $0 $0 $292,182
AQUATICS $0 $0 ($58) $0 $599 $242,329
SPORTS CENTER MEMBERSHIPS $4,388,563 $4,477,806 $3,507,128 $633,929 $2,030,407 $1,684,574 FITNESS $0 $0 $0 $0 $0 $110,688
SPORTS GYM $0 $0 $0 $0 $995 $162,409
OTHER PARK & REC SERVICES $0 $0 $0 $0 $0 $19,570
DONATIONS $0 $0 $0 $2,000 $0 $0
OTHER REVENUE $0 $0 $0 $0 $7,434 $0
OVER/SHORT $0 $0 $0 $0 $0 $0
Total Revenue $4,388,563 $4,477,806 $3,507,070 $635,929 $2,039,434 $2,511,752 Expenses Fiscal 17-18 Fiscal 18-19 Fiscal 19-20 Fiscal 20-21 Fiscal 21-22 Budget 22-23

EXPENSE DETAIL
TEMP/SEASONAL STAFF $1,448,491 $1,528,433 $1,288,373 $196,816 $998,702 $1,437,315 MANAGEMENT PAYROLL $1,701,252 $1,724,672 $1,869,549 $468,241 $747,689 $873,947 FULL TIME $1,520,343 $1,539,671 $1,668,875 $395,549 $566,271 $707,165 OVERTIME $30,278 $25,786 $22,203 $13,502 $32,224 $0
FULL TIME $144,233 $150,906 $166,400 $54,704 $134,754 $160,782 OVERTIME $6,398 $8,309 $12,070 $4,485 $14,440 $6,000
PAYROLL TAXES, BENEFITS, BONUS $1,308,887 $1,278,952 $1,308,285 $492,418 $1,076,119 $841,194 OPERATING EXPENSES/SUPPLIES $344,613 $347,330 $273,505 $98,064 $201,808 $477,202 UTILITIES $368,357 $392,619 $318,004 $177,818 $354,882 $416,000 REPAIR & MAINTENANCE $123,897 $112,826 $149,195 $70,772 $114,145 $103,370 OTHER OPERATING EXPENSES $377,947 $305,293 $323,636 $227,432 $230,338 $507,633

EXPENSE SUMMARY
Total Facility Expenses $492,255 $505,446 $467,199 $248,590 $469,027 $519,370 Total Operating Expenses $722,560 $652,623 $597,141 $325,496 $432,146 $984,835 Total Temp/Seasonal Staff $1,448,491 $1,528,433 $1,288,373 $196,816 $998,702 $1,437,315 Total Management Payroll $1,701,252 $1,724,672 $1,869,549 $468,241 $747,689 $873,947 Total Payroll Taxes, Benefits, Bonus $1,308,887 $1,278,952 $1,308,285 $492,418 $1,076,119 $841,194 Total Operating Expenses $5,673,445 $5,690,125 $5,530,545 $1,731,560 $3,723,684 $4,656,661 EBITDA ($1,284,882) ($1,212,319) ($2,023,475) ($1,095,631) ($1,684,250) ($2,144,909) % of Revenue -29% -27% -58% -172% -83% -85%
5180 - Equipment Outlay ($4,111) $0 $0 $0 $0 $0
5180 - Equipment Outlay - Buildings $0 ($2,950) $0 $0 $0 $0 5180 - Capital Outlay ($69,407) ($29,055) ($82,386) ($21,134) ($48,581) ($122,000) 5189 - Equipment Outlay - Buildings $0 $0 $0 $0 $0 ($276,243) 5189 - Capital Outlay $0 ($11,961) $0 $0 $0 $0
Total Net Income ($1,358,401) ($1,241,374) ($2,105,861) ($1,116,765) ($1,732,830) ($2,543,152) DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 47, Packet Page 54 For this exercise, SFA focused on the financial performance knowing that there are areas that the Monterey Sports Center intentionally performs differently than industry benchmarks. The goal is not to demonstrate that the Monterey Sports Center is underperforming but instead to provide the Monterey Sports Center leadership team with insights related to potential revenue generation and expense control strategies to improve financial performance.

SFA analyzed the historical financial performance of the facility as provided by the department. This analysis included information such as revenue reports, expense details, staffing structure, and financial reports. The following budgetary allocations have impacted the total expenses for the MSC resulting in year-over-year significant growth in specific expenditure line items:
§ UAAL Unfunded Actuarial – implemented FY21 at appx $130,000 – FY22 appx. $560,500 § Information Services – FY22 $93,719 increased FY23-23 to $243,472 § Risk Management – FY18-19 $38,435 increased each year – FY22-23 $254,420 The tables that follow demonstrate a comparison of SFA’s industry key performance indicators/metrics and the operation of the Monterey Sports Center. All the industry benchmarks related to revenue, expenses, and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are based on industry data and SFA’s experience in facility operations. This data includes non-profit and for-profit facilities with similar assets and business/operating models.
3838

HISTORICAL FINANCIAL REVIEW
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 48, Packet Page 55 3939

HISTORICAL FINANCIAL REVIEW
INDUSTRY BENCHMARK – REVENUE PER SQUARE FOOT
The following chart details industry benchmarks for total building average revenue per square foot. It is important to note that based on the historical revenue noted in the chart above, the Monterey Sports Center is performing in the High Performing to Top Performing category for publicly owned and operated sports/fitness facilities.

Rev./SF Total Rev./SF Total Rev./SF Total
Total Building SF 71,255 $25 $1,781,375 $35 $2,493,925 $45 $3,206,475 Industry Avg. High Performing Top Performing
Total Building Area Revenue Per Square Foot Data*
SF
The Monterey Sports Center revenue trend shows revenue decline in-line with the expected impact experienced throughout the fitness and wellness facility industry during the pandemic. Revenues increased 2021 from 2020, which shows a positive trend to rebound from the impact of the COVID-19 pandemic. In 2022 SFA has experienced similar rebound trends in SFNetwork venue financial performance.

SFA understands that the Monterey Sports Center was established and strives to serve the community as a primary goal. For this exercise, SFA focused on the financial performance knowing that there are areas that the Monterey Sports Center intentionally performs differently than industry benchmarks. The goal is not to demonstrate that the Monterey Sports Center is underperforming but instead to provide the Monterey Sports Center leadership team with insights related to potential revenue generation and expense control strategies to improve financial performance.
6/30/2018 Actual 2019 2020 2021 2022
Revenue
DRAFT
$ 4,477,806.17 $ 3,507,070.27 $ 635,929.36 $ 2,039,433.94 Council Special Meeting, 5/24/2023, Item No. 2., Item Page 49, Packet Page 56 SFA analyzed the historical financial performance of the facility as provided by the department. This analysis included information such as revenue reports, expense details, staffing structure, and financial reports. The tables that follow demonstrate a comparison of SFA’s industry key performance indicators/metrics and the operation of the Monterey Sports Center. All the industry benchmarks related to revenue, expenses, and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are based on industry data and SFA’s experience in facility operations. This data includes non-profit and for-profit facilities with similar assets and business/operating models.
4040

HISTORICAL FINANCIAL REVIEW
The chart above shows a range of benchmarks for gross revenue generated per square foot of total facility space for total revenue. Additionally, the chart outlines the Monterey Sports Center’s performance for total revenue per square foot of facility space using FY21-22 actual revenue and FY22-23 budgeted revenue.

The chart above shows the benchmarks for several expense categories as a percent of total revenue as well as Monterey Sports Center’s performance for each expense category as a percent of revenue. It is important to note that the cost-of-living index in California must be considered when comparing to the industry benchmarks, as the cost-of-living in California is significantly higher than other areas in the country.

Based on the industry benchmark comparisons above, SFA has developed insights related to the historical financial performance of the Monterey Sports Center:
§ Revenue
§ Monterey Sports Center is above the industry average benchmark for revenue per square foot in all years.
§ Underutilized space within the facility is not currently generating revenue generating and could be repurposed to expand revenue generating capabilities. These spaces include potential lease space (medical, therapy, wellness, etc.) in the space that previously housed staff that have not returned after Covid. § SFA has identified that the membership fees at Monterey Sports Center are within the expected fair market value.

Indoor Industry
Average
HighPerforming
(Threshold)
TopPerforming
(Threshold)
MSC FY 21-22 Budget FY
22-23
Indoor Sports, Recreation, Fitness, & Ent. $24.80 $35.00 $45.00 $28.62 $35.25 Total Revenue per Square Foot - Primary Business Model (Including Ancillary Revenue) Industry
Average
HighPerforming
(Threshold)
TopPerforming
(Threshold)
MSC FY 21-22 Budget FY
22-23
Facility Expenses 12.4% 9% 6% 23% 21%
Operating Expenses 16.0% 12% 8% 21% 39%
Management Payroll 10.7% 12% 10% 37% 35%
Payroll Taxes/Benefits/Bonus 4.9% 5% 5% 53% 33%
Total Expenses as a Percent of Revenue (Including Standard Expense Categories) DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 50, Packet Page 57 § Facility Sponsorship is not delineated in historical financials, annual expectation could exceed $50,000 - 100,000.
§ Establish a restricted endowment fund for the Monterey Sports Center would focus on raising additional funds through endowments and grants and provide scholarships for membership/programs based on a designated application and approval process. § Expenses
§ Monterey Sports Center performance as compared to industry benchmarks varies depending on the expense category. Facility performance is:
§ Higher than the industry benchmark for facility and operating expenses. § Higher than the industry benchmark for total payroll expenses which includes salaries, taxes, and benefits.
§ Above the industry average for facility and operating expenses § Total Payroll Expenses (Salaries, Taxes, and Benefits) § Payroll Taxes and Benefits are fully burdened for GEM, MEA, and MEMEA groups are 78%, 65%, and 58% respectively.
§ The industry average for similar non-profit facilities for payroll taxes and benefits is 30-35% of exempt salaries and 18% of non-exempt salaries. § The best performing facilities achieve a payroll taxes and benefits ratio of 21% total salaries.
4141

HISTORICAL FINANCIAL REVIEW
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 51, Packet Page 58 42 Following the initial site visit, SFA completed a community engagement survey in support of the optimization recommendations for the Monterey Sports Center. SFA collected and evaluated responses from residents and other facility users to quantify the likelihood of market segments using the Monterey Sports Center, as well as community needs/desires for future enhancements/developments. The survey was developed and administered through a web-based survey program for a period of four weeks (August 29, 2022 – September 25, 2022).

The following survey results have been analyzed to provide summaries of the data specific to sports/recreation/community facilities and programs within Monterey, CA. The goals of the survey were to assess the items below:
§ Past facility uses
§ Perceptions of the Sports Center as well as other existing facilities in the market § Likelihood of participating in existing and new offerings § Reasons for not using the Sports Center
§ Facility amenity requirements and/or preferences
§ Pricing insights and opinions on the area
§ Desired programs, classes, membership options, & other community functions § Perceptions and potential for funding of future park and facilities development/enhancements

SURVEY RESPONSE ANALYSIS
4242
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 52, Packet Page 59 43 FINDINGS AND INSIGHTS
The Monterey Sports Center received a complete copy of the survey results in a previously delivered document.

The following is a summary of the survey data.

A total of 493 responses were received during the survey period. Of these responses, 79% of the respondents completed the entire survey. Survey questions asked respondents to provide their feedback on a variety of questions including reasons that they visit or don’t the Monterey Sports Center, their frequency of attendance, and what they would like to see if facility improvements/future development/new programs occurred.

Below is a summary of the survey data:
§ According to self-reported age data from 386 respondents, the median age of survey respondents was 57 years old. This is significantly higher than the median age for Monterey, CA as reported by the US Census, which is 36.9 years old.
§ Of the 386 survey respondents that reported their home zip code, 54% note that they live in the 93940-zip code (Monterey). 18% note that they live in zip code 93950 (Pacific Grove Area) and 10% note that they live in 93955 zip code (Seaside).
§ 80% of the survey respondents indicated that they are members of the Monterey Sports Center. § 35% of the member respondents indicate that they visit the Monterey Sports Center between 10 and 20 times a month, while 35% of non-member respondents indicated that they visit the Monterey Sports Center 1 to 9 times a month.
§ Programs that are noted by respondents to be frequented the most include personal/self-directed fitnessweights, personal/self-directed fitness-cardio, group fitness classes (group exercise, yoga cycling), and individual lap swim. Respondents also commented that family recreational swimming, aqua therapy, and the sauna were popular programs that they participate in and enjoy. This information corresponds directly to the space/activity areas that their respondents noted they visited the most: lap pool, cardio equipment, free weights, and the group exercise studio (Studio 1) were the top 4 responses. § 46.87% of the 367 member respondents to Question 8 (Cleanliness) rated the overall cleanliness of the Sports Center to be excellent. 41.69% rated the condition as good. 8.99% rated the condition as fair and

1.36% rated the condition as poor.
§ 54.22% of the 367 member respondents to Question 9 (Physical Condition) rated the overall physical condition of the Sports Center in good condition, 25.07% rated it in excellent condition, 18.26% rated it in fair condition, and 2.18% rated it in poor condition.
§ Of the respondents that indicated that they use the aquatic assets, a combined 70% rate the condition of the large lap pool in excellent (26%) and good condition (44%), while a combined 44% rated the condition of the small therapy pool in excellent (34%) and good condition (10%). The majority of respondents (66%) noted that the do not use or have no knowledge of the condition of the water slide. § Of the respondents that indicated that they use the courts located within the Sports Center, a combined 38% rate the condition/playability of the courts as either excellent (12%) or good (25%), while 60% indicated they the either do not currently use or have no knowledge of the condition/playability of the court.

SURVEY RESPONSE ANALYSIS
4343
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 53, Packet Page 60 44 FINDINGS AND INSIGHTS
§ Of the respondents that indicated that they use the fitness equipment (free weights/cardio) 59% rate the condition of the free weight equipment in excellent (19%) or good condition (40%). 60% rated the cardio equipment in excellent (18%) or good (43%) condition. Comments received regarding the free weight and cardio equipment include main themes such as addressing the regular maintenance and replacement of equipment, updating equipment amenities to include USB ports, adding of specific pieces of equipment (additional rowing machines, straight pull-up bar, lag extension, leg curl, and calf machines,) and addressing HVAC/ventilation concerns.
§ Most member respondents (31%) report that they visit the Sports Center between the hours of 8am – 12pm. The second most reported visited time is between 5pm and 8pm. Early morning (5:30am – 8am) and midday (12pm – 3pm) shared the third most visited times (14.56% respectively). § 90% of all respondents indicated that they have visited either the men’s or women’s lockers rooms within the Sports Center. 72% of these respondents rated the condition of the locker rooms as either excellent (19%) or good (52%).
§ While most respondents (60%) noted that they do not use other sports/recreation/fitness facilities in the area other than the Monterey Sports Center, those that do visit other facilities indicated that they visit yoga studios, city parks, athletic clubs, tennis centers, and CrossFit/boxing/specialized gyms. The main reasons noted by respondents for visiting/participation at other facilities is the availability of sports/recreation/fitness needs and programs that are currently not offered by the Monterey Sports Center, newer facility assets, and the proximity/convenience of the facility to the respondents’ home/work. § Café/concession services, towel service, and childcare are the programs indicated by respondents that they would most like to see offered/increased offerings. § Respondents also noted that the addition of massage services, outdoor programs, physical therapy, dance and pickleball would make them a more frequent user of the Sports Center. § 63% of respondents indicated that they feel the fees charged for membership to the Sports Center are either extremely valuable (24%) or very valuable (39%). 58% of respondents indicated that they probably would not (40%) or definitely would not (18%) pay more for their membership. § 57% of respondents indicated that they feel that the fees charged for programs are either extremely valuable (18%) or very valuable (39%). 58% of respondents indicated that they probably would not (44%) or definitely would not (14%) pay more for program fees. § Most respondents (76%) do not follow the Sports Center on social media. Most (45%) find out about new Sports Center programs, classes, and activities by the flyers posted at the Sports Center or by word of mouth.
§ 53% of respondents would either strongly support (17%) or support (36%) a facility fee for Sports Center users which would include a portion of the fees dedicated to facility improvements. § 77% of the respondents would either strongly support (44%) or support (335) utilizing the Neighborhood and Community Improvement Program for funding capital improvements of the Sports Center. § 54% would either strongly support (21%) or support (32%) a bond measure, while 32% are undecided. § 76% of respondents either strongly support (40%) or support (36%) using the Capital Improvement Program to improve the facilities and assets of the Sports Center.

SURVEY RESPONSE ANALYSIS
4444
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 54, Packet Page 61 Understanding of the volume of inventory the Monterey Sports Center maintains through regular operations, the inventory of other existing service providers, community needs, and national trends, SFA conducted a program gap analysis. To understand any overlaps or duplication of services, SFA commenced the gap analysis with a review of all programs that are run by the Monterey Sports Center, as well as programs offered by existing service providers in the local market. Programs are reviewed in the categories of indoor fitness programs, indoor aquatics programs, and summer camp programs.

Indoor Fitness Programs
The chart below displays the indoor fitness programming currently offered in the community, from a variety of sources:
4545

PROGRAMMING REVIEW
The indoor fitness programs offered by existing service providers that are not offered by the Monterey Sports Center include:
§ Group Fit Box/KB
§ Group VLT/Row
§ Group Dance Fit
Indoor Fitness Programs Monterey Sports
Center
Similar External
Service
Providers
High Intensity Interval Training
(HiiT) ✔ ✔
Group Training ✔ ✔
Wearable Technology ✔
Cardio Training ✔ ✔
Body Weight Training ✔ ✔
Strength Training ✔ ✔
Yoga, Pilates, Zumba ✔ ✔
Personal Training ✔ ✔
Certified, Experienced and
Professional Trainers ✔ ✔
Fitness Programs for Older
Adults ✔ ✔
Functional Fitness ✔ ✔
Group Personal Training ✔ ✔
Flexibility & Mobility Rollers ✔ ✔
Core Training ✔ ✔
Sport Specific Training ✔ ✔
Group Cycle ✔ ✔
Group Fit Box/KB ✔
Group VLT/Row ✔
Group Dance Fit ✔
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 55, Packet Page 62 Indoor Aquatics Programs
The chart below shows the Monterey Sports Center’s aquatics programs and other programs that SFA observed in the local market:
4646

PROGRAMMING REVIEW
Key programs that are offered by other local service providers not offered by the Monterey Sports Center include:
§ Youth Pre-Swim Team/Development Team
§ Aqua Rehab Classes
§ The City of Monterey currently contributes annually to the Josephine Kernes Memorial Pool, which provides adaptive aquatics for children and adults with physical, emotional, and intellectual disabilities. Yearly evaluation of this relationship is essential to ensure that services are not duplicitous of anything offered at the Monterey Sports Center and that adequate service provision for the community occurs. SFA recommends collaborative programs and partnership with the Josephine Kernes Memorial Pool to ensure that services rendered by both organizations complement each other.

Gaps: Organized Masters swim program is a gap in the community that may be considered for program expansion at the Monterey Sports Center. This program may be considered during the recommended extended hours (5:30am – 7am M-F or after 8pm M-F) to not conflict with existing programs.

Indoor Aquatics Programs Monterey Sports
Center
Similar External
Service
Providers
Youth Swim Team ✔
Adult/Masters Swim
Water Aerobics ✔ ✔
Aqua Rehab Classes ✔
Lifeguard Certification ✔ ✔
Group Lessons ✔ ✔
Private Lessons ✔ ✔
Open Swim ✔ ✔
Lap Swim ✔ ✔
Warm Water Pool/Kids Pool ✔ ✔
Sauna ✔ ✔
Slides/Obstacle Course ✔ ✔
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 56, Packet Page 63 Summer Camp Programs
The chart below shows the Monterey Sports Center’s summer camp programs and other programs that SFA observed in the local market:
4747

PROGRAMMING REVIEW
Key programs that are offered by other local service providers not offered by the Monterey Sports Center include:
§ Overnight Week Camps
§ Art Camps
§ Dance Camps
§ Music Camps
§ STEM/Robotics Camp
§ Just for Girls Camps
§ Space Camps
§ Baking Camp
There do not appear to be any camp gaps that could be fulfilled by the Monterey Sports Center. Kindergarten and sports performance camps and clinics should be considered as potential additional revenue generating programs.

Summer Camps Monterey Sports
Center
Similar External
Service
Providers
Sports Camp ✔ ✔
Day Camp ✔ ✔
Overnight Week Camp ✔
Art Camp ✔
Dance Camp ✔
Music Camp ✔
STEM/Robotics Camp ✔
Just for Girls Camp ✔
Space Camp ✔
Baking Camp ✔
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 57, Packet Page 64 Membership
In addition to analyzing gaps in past and current program offerings at the Monterey Sports Center, SFA also conducted a pricing study, as noted in the Key Data: Existing Facility Providers – Pricing section, to compare current market pricing for membership-based fitness dues in the Monterey market. When comparing prices, it is important to consider the quality of the facility and services offered comparted to those offered at the Monterey Sports Center. Membership pricing at the Monterey Sports Center is within comparable market value when comparing to direct competitors such as Montage Wellness Center and Gold’s Gym (Monterey Sports Center Family membership is currently $78.30/month and Montage Wellness Center is currently $78.50/month; Monterey Sports Center adult monthly is $54.90 and Gold’s Gym in $50/monthly).

SFA further reviewed the existing membership and compared that to industry benchmarks for average, aboveaverage, and high-performing fitness centers. It is important to note that, the Monterey Sports Center has a mission to offer comprehensive, quality recreational and fitness programs that serve the diverse community.

Membership categories within the MSC portfolio reflect the mission and provide a diverse range of membership options, including youth, individual, family, senior, corporate, etc. The percentage of the population that a highperforming fitness center can expect to captures varies depending on factors such as location, population demographics, competition, and the center’s marketing strategies. Some studies have found that membership at fitness centers typically ranges from 5% to 20% of the total population in the given area. The chart below details the population within 10-minutes, 15-minutes, and 30-minutes of the Monterey Sports Center by age. Adult (ages 20 – 59) and seniors (over age 60) represent the largest population categories and as such correspond to the largest membership categories at the Monterey Sports Center. 4848

PROGRAMMING REVIEW
In addition to membership categories for youth, teens, adults and seniors, Monterey Sports Center offers a family membership category which enables two adults and up to 6 dependents to participate in programs, services, and amenities within the facility. As of March 2023, the Monterey Sports Center noted 4,424 memberships.

Youth 0 - 9 1,024 7,391 12,005 31,617
Teen 10 - 14 460 3,582 5,699 15,232
Teen 15 - 19 444 4,050 7,496 16,536
Adult 20-59 7,833 38,573 58,491 128,527
Senior 60-85+ 3,412 19,528 30,442 59,044
Total Population 13,174 73,110 114,442 250,932
30 Minutes
Population by Drive-Time
from the Monterey Sports
Center
5 Minutes 10 Minutes 15 Minutes
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 58, Packet Page 65 49 The chart below details the membership information shared by the MSC regarding memberships by category for pre-Covid year and for 2023. It is important to note that youth and teen members are combine in this chart but are offered as separate membership packages in 2023. Also, three-month and six-month membership plans that were offered in 2018 and 2019 are not available in 2023.

As compared to pre-Covid years, 2018 and 2019, the percentage of youth members (including teens) was approximately 2.7% of the total membership. In 2023 youth and teens comprise 4.1% of total membership. In 2018 and 2019, adult members comprised approximately 35.4% of membership. In 2023, adult comprise 32.4% of membership. Family membership in 2018 and 2019 was 29.5% of total membership, while in 2023 family membership is 35.8%. In 2018 and 2019, the percentage of senior members was 24.9%, while in 2023 senior member comprise 25% of membership. Senior members at the Monterey Sports center exceeds industry averages and may be correlated to a population within 15 minutes of Monterey that exceed the US median age.

PROGRAMMING REVIEW
4949
Monterey Sports Center
Membership By Category 2018 2019 Jan-23 23-Mar
Youth & Teen 9 - 17 111 139 68 181
Adult 20 - 60 1730 1612 846 1435
Senior 61 - 85+ 1194 1155 812 1106
Family 1426 1354 1191 1582
Corporate 333 371 93 120
Total Population 4794 4631 3010 4424
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 59, Packet Page 66

RECOMMENDATIONS
SFA recommends the following best practices for membership and pricing enhancement:
§ Pricing and Revenue Generation
§ Currently, the Monterey Sports Center membership prices are comparable with other service providers in the area.
§ The Monterey Sports Center currently offers a resident and non-resident rate for membership. § SFA recommends assessing membership rates annually to be in-line with fair market value for the programs and services offered at the Monterey Sports Center. § To reduce the gap between the current price and fair market value, SFA recommends assessing annual price increases of up to the CPI for all fee-based memberships and programs (resident and non-resident). Consideration for when the last price increase needs to be measured when determining price changes. The price increases noted in the pro forma are recommendations and Monterey may elect to increase prices according to established policies. § Noting that approximately 11% of the residents of Monterey live under the poverty level and to ensure that membership rates provide equitable access for all Monterey residents, SFA encourages the Monterey Sports Center to establish a privately funded scholarship. This may be accomplished through a “Friends of Monterey Sports Center” group and would need to comply with all State and Federal laws and conditions for a non-profit group. § Continue facility enhancement fee (5% of all transactions) § Ensuring that this continues to be properly notices to all participants and positively received by the community, this facility enhancement fee can contribute to the annual capital outlay/capital improvement and building enhancements/system repairs
§ Fitness Assessment & Orientation
§ SFA has seen a shift from charging for these services to including them with a new membership as part of a promotional package to attract new members. This is a practice that the Monterey Sports Center has included and should continue to include to drive membership and provide value add to becoming a member.
§ Based on Counsilman-Hunsaker experience with facilities like the Monterey Sports Center can assume that 20-25% members use the pool on a semi-regular basis. This can equate to a 25% higher membership level because of the aquatic amenities compared to facilities that do not have pool access.

Maximizing on swim lessons revenue is essential in aquatic programming. Water Fitness classes will help generate membership from the 55+ age group.
§ New member marketing should be directed toward individuals ages 18-34 years old (Gen Z and Millennials).

Research has noted that this age range is 60% more likely to join fitness center and be regularly users of fitness centers. Based on the survey data also, this age range was underrepresented in the respondent data and may be a good target for new members of the Monterey Sports Center. Approximately 25% of the population of Monterey County falls within the ages of 18-34. While all County residents will not join the Monterey Sports Center and the age distribution within the City may not mimic that of the county, a target goal for new members for this age group should be evaluated and adopted annually.
§ Overall membership is expected to grow between 15-percent and 30-percent with a five-percent stabilized annual growth rate. The goal for MSC total membership should fall within the range of 5,000 to 5,700 total members.
5050

PROGRAMMING REVIEW
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 60, Packet Page 67

RECOMMENDATIONS
§ Understanding competition and market draw is also essential when determining annual new member goals. Based on SFA research and the existing competition, the total membership goal of the Monterey Sports Center should be between 15-25% of the total five-minute population of the facility and between 5- 10% of the 10-minute population. On average, 21% of the population in the United States are members of a fitness gym.
§ Membership tours should have a script that is reviewed and approved to ensure that guides are accurately communicating the value of each area.
§ Membership team members should be dedicated and motivated to reach membership sales goals. § A proactive membership outreach (marketing) campaign needs to be developed and executed year-round with specific seasonal promotions and offers that generate sales leads, focus on specific messaging, and are aimed at target markets.
§ Marketing and sales effectiveness should be monitored by lead source, closing percentage, retention, and other key performance indicator metrics.

Fitness
Fitness classes are well attended and included in membership. Some classes are over capacity and need room for expansion. There are also additional classes that could be offered; however, a lack of group exercise rooms and spaces limits the number of classes that can be offered each week and the capacity of those classes. There is opportunity to increase personal and group training with better marketing, staffing, and program offerings. SFA recommends the following fitness offering enhancements:
§ Monitoring Class Attendance
§ Utilize SmartRec class tracking system and remote kiosks to track participants by class. § Evaluate class attendance weekly, monthly, and quarterly to track participation changes and classes which may be at capacity and could be offered in additional sessions. § Group Exercise
§ Utilize the gym for larger group exercise classes such as Zumba or step and any other well attended classes. Gym focused classes during non-peak sports time could enhance class offerings and provide additional space.
§ Utilize the outside sundeck as additional space for group exercise classes/CrossFit. § Personal Training
§ Cross train front desk and non-fitness employees to sell personal training and group classes § To combat attrition of trainers and encourage development of trainers, include an incentive related to certification.
§ This should be based on length of employment to reimburse 50% of new certification cost in 6 months and 100% after a year.
§ Explore additional amenities such as message chairs to enhance membership service and experience. These could be included as part of personal training recovery and be an added benefit to personal training packages.
5151

PROGRAMMING REVIEW
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 61, Packet Page 68

RECOMMENDATIONS
Aquatics
SFA recommends the following aquatics enhancements:
§ Conduct an aquatic facility conditions assessment to develop future capital improvement plans and funding estimates (in addition to the resurfacing and dehumidification identified in FY2023). § Reimburse lifeguard certification like personal training certification to incentivize development of new and retention of existing lifeguards.
§ Reimburse 50% of certification cost at six months of employment and 100% at one year. § The types of aquatic programs and classes offered at Monterey Sports Center are standard and there is not a huge opportunity to offer new classes but work to maximize the participation levels and revenue from current aquatic class offerings:
§ Increase swimming lesson rates or restructure to offer fewer classes per session. While offering private and semi-private lessons generate a higher revenue per student, if the lesson fees were increased to industry norms the group lessons would generate more revenue per 30-minute class § Water fitness classes are included in the membership rate at the Monterey Sports Center.

Consideration should be given to adding a fitness class add-on to the monthly/annual membership rate
§ Pre-competitive swimming could undergo a slight program fee increase with little impact on participation levels
§ Utilize early opening and later closing time to develop Masters Swim program and offer more lane rentals.

Sports
SFA recommends exploring the possibility of expanding the Sports Program (if contract instructors or part-time staff are available to assist with program growth). Additional sports that have the potential to grow membership and participants at the Monterey Sports Center include:
§ Adult sports – leagues and drop-in (Men’s and Women’s Basketball) § Additional season of Adult Co-ed, Men’s, Women’s Volleyball § Pickleball – leagues and clinics
§ Non-traditional recreation clubs, such as:
§ Running clubs – warm-up/cool down at MSC and a series of routes within Monterey § Cycle clubs – include indoor cycle class that focuses on long ride endurance § Paddle Clubs – training within the pool and graduating to open paddle in the bay § Youth/Tween/Teen programming/space – consider active reuse of KidsZone space to an adaptable space that could be used for multifunctional programming, i.e. KidsZone 30 hours per week mornings and afternoons, TeenZone 8pm – close. If KidsZone is not restarted, SFA recommends considering active program use of the space during operating hours.
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PROGRAMMING REVIEW
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 62, Packet Page 69 53 The following section outlines SFA’s recommendations related to the optimization of the Monterey Sports Center physical complex/facility.

PHYSICAL FACILITY
Overall, the Monterey Sports Center is perceived by survey respondents to be well-maintained and up to industry standards for physical assets. There are several maintenance issues than need to be addressed and the staff/department leadership team have a plan and system in place to remedy these issues. SFA recommends focusing capital resources on physical enhancements only to areas that will generate a positive return on investment. SFA recommends the following physical enhancement considerations:
§ SFA recommends the following for the front desk:
§ Locate kiosks next to the front desk to enhance customer check-in experience with new SmartRec system.
§ Create a gathering/lounge/community space adjacent to concession/vending to encourage community and socialization amongst members. This may include bar-height tables and individual seating, as well as accessible seating options, as well as some small tables of varying heights to ensure accessible options. Update the lobby area to one to two sports-specific art-pieces previously noted as a potential for collaboration and incorporation of public art into the facility.

These pieces could be rotated seasonal and feature Monterey-based artists. § Utilize outdoor and non-traditional group exercise space to accommodate more classes and grow membership base.
§ Expand group exercise space during seasonal classes by utilizing the outdoor sundeck. § Utilize the gym for large fitness classes.
§ Upgrade and change current café feature to enable pop-up contract vending, special café’ events, and seasonal vendors
§ Seasonal pop-up contract events that are well advertised and available to members and nonmembers and may attract potential new members who have not visited or are unaware of the MSC.
§ Renovate the existing area or an adjacent area to allow for health-conscious vending machines. § Focus on offerings like fitness/products, nutritional supplements, protein shakes. § Convert to leased cardio equipment in the fitness center. § All fitness and cardio equipment are currently owned and incurs significant capital costs to replace and refresh (annual preventive maintenance and new equipment purchase exceeds $40,000 annually). The MSC cardio equipment inventory notes 53 pieces of equipment with six pieces being purchased in 2012, three pieces purchased in 2013, and nine pieces purchased in 2014.

SFA recommends replacing equipment that is in poor condition on a cycle, with the oldest pieces replaced first. Transitioning to leased cardio equipment and staggering the contracts for each piece to 1/3 of the cardio equipment each year would replace all cardio equipment within three years and put the equipment on a standard replacement cycle. New equipment will enhance membership perception and provide additional value to membership.

PHYSICAL COMPLEX/FACILITY
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 63, Packet Page 70 54 § Gym Floor Lining
§ SFA recommendations lining the gym primarily for basketball and volleyball use. In some cases when pickleball or other sports such as badminton aren’t established as regular revenue generating programs, SFA recommends putting tick marks on the floor so that you can easily set up lines with non-marking floor tape.
§
§ Fitness Layout
§ SFA recommends reconfiguring the layout of the fitness equipment in the cardio room, weight room, and hall.
§ SFA recommends removing and storing any equipment that is under-utilized by members. § Current layout is satisfactory, however the MSC needs to ensure that cardio and selectorized equipment is placed together and that racks/free weights are place together for consistency in flow during training.
§ SFA recommends placing all cardio equipment on the perimeter of the room and the other equipment in the middle. This may save space as many of the cardio machines can be place close to the wall and still meet industry standard of 39” clearance. § Aquatics Facility
§ As previously noted in the programming section, SFA recommends resurfacing and installing the dehumidifier as identified in the FY23 CIP, as well as working with an aquatic's consultant, such as Councilman-Hunsaker, for a structural and conditions analysis for all areas in aquatics.
§ Broadcasting of Music and Media within the Monterey Sports Center § Music: While survey responses indicated some demand for public broadcasting of music within the facility it is recommended to encourage individual music experiences (Bluetooth and USB capabilities within the design of fitness equipment) to avoid excessive noise and potential conflict that may distract both patrons and staff. Should public broadcasting of music be considered, a variety of music is available with ASCAP and BMI licensing to alleviate violating any copyright infringements. Additional facility improvements may be needed to enable public music broadcasting within specific spaces in the facility.
§ Television/Digital Displays: In addition, the televisions were mentioned throughout the survey responses. It is recommended that televisions and any video displays located within the facility broadcast local news, sports, or other non-political programming without volume and captions turned
§ Towel Service
§ SFA recommends not reinstating towel service at this time due to expense and potential continued health risks.

PHYSICAL COMPLEX/FACILITY
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 64, Packet Page 71 As demonstrated in the Historical Financial Review
Performance Section of this report, MSC’s FY22-23
budget projects a $2.5 million deficit when accounting
for all revenue and expenses attributed to the MSC
(expenses and payments associated with bonds are
excluded from this deficit). The tables below
summarize each primary category of revenue and
expense noted in the MSC FY22-23 budget.

FINANCIAL ANALYSIS AND FIVE-YEAR OUTLOOK
5555
MSC’s FY22-23 BUDGET SHOWS A $2.5M
DEFICIT. THIS PLAN WILL ALLOW MSC TO

REDUCE THE ANNUAL DECIFIT TO UNDER
$1M WHILE IMPROVING SERVICES
PROVIDED TO RESIDENTS.

To begin its financial assessment and create a baseline from which to improve, SFA performed a detailed analysis of the MSC FY22-23 budget, as well as a historical budget review, focusing first on operations. SFA isolated operating revenue and expenses, as well as operation expenditures included fixed categories for indirect or crossdepartment service charges (expenses associated with building maintenance, benefits, risk management, ISD, and other City of Monterey provided operational services).

REVENUE FY22-23 BUDGET
DAILY ADMISSIONS 292,182.00
AQUATICS 242,329.00
SPORTS CENTER PROGRAMS 1,684,574.00
FITNESS 110,687.80
SPORTS - GYM 162,409.35
OTHER PARK & REC SERVICES 19,570.00
Total Revenue 2,511,752.15
EXPENSES FY22-23 BUDGET
SALARIES/BENEFITS 2,879,536.12
SERVICES/SUPPLIES 698,718.00
SERVICES/SUPPLIES INCL INTERNAL SVC CHGS 5,000.00
EQUIPMENT OUTLAY 122,000.00
INTERNAL SERVICE CHARGES 497,892.00
SALARIES/BENEFITS - BUILDING 272,920.25
SERVICES/SUPPLIES - BUILDING 297,853.30
INTERNAL SERVICE CHARGES - BUILDING 4,541.00
Total 500 - PARKS AND RECREATION - MSC 5,054,904.07
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 65, Packet Page 72 Working with the MSC leadership team and utilizing real-time strategies for best practices for revenue generation backed by SFA’s operational expertise and real-world financial data from over 700 facilities across the country, SFA evaluated revenue potential, identified opportunities and set targets to increase revenue generation and control expenses over the next five years. The following table summarizes the forecasted revenue, cost of goods sold, and operating expenses for the next five years. The financial performance details have been provided in the full financial documents provided as separate attachments to this report.

FINANCIAL ANALYSIS AND FIVE-YEAR OUTLOOK
5656
As demonstrated in the previous table, the forecasted operations at the Monterey Sports Center decreases the operational subsidy from $2.5 in FY22-23 (as noted on the previous page) to generating positive EDITBA of $271,676 in YR5 (FY27-29). It is important to note that capital replacement and the existing bond payment are noted below operating EBITDA and are reflected in total Net Income. Including the bond and capital outlay expenditures, total net income declines in from -$975,211 in YR1 to -$348,460 in YR5. SFA’s projection of revenue potential results in revenue growth of approximately $2.3 million from FY22-23 to $5,885,483 in YR5/FY 27-28.

To explain each of the strategies and how the financial impact was calculated, the following information provides context to SFA’s projections and the development of the pro forma documents.

1. Participation Growth
§ Sports/Gym Programs: as a division within the MSC that generates revenue and has the potential to increase program participation and program types, SFA has shown increases in the following:
§ Youth programming/camps – 25% participation growth over the five-year period, including the addition of a kindergarten half-day camp beginning in YR1. § Basketball – 18% increase in participation with 5% in Yrs. 2 & Yrs. 3 as programs continue to develop and a 4% in Yrs. 4 & Yrs. 5.
§ Volleyball – 29% increase between Yrs. 2 and Yrs.5.
§ Membership: as the division within MSC that is the main generator of revenue and has potential to return to pre-Covid participation, SFA has shown an increase of 15% in Yr,1, 10% in Yr.2, 5% in Yr.3, and 3% in Yr.4 & Yr.5. This growth considers the strategies regarding membership staff and targeted membership campaigns to attract and retain members in all categories.
§ Aquatics operations and programs are stable and indicate some potential for growth and SFA recommends a 2.5% growth each year over the five-year period.

Financial Performance Summary (Model) - with Bond
FY22-23 BUDGET Year 1 Year 2 Year 3 Year 4 Year 5
Total Revenue $2,511,752 $4,507,950 $4,970,839 $5,259,863 $5,649,080 $5,885,483 Total Cost of Goods Sold $1,680,405 $1,778,233 $1,871,427 $1,970,480 $2,061,370 Gross Margin $2,511,752 $2,827,545 $3,192,606 $3,388,436 $3,678,599 $3,824,113 % of Revenue 63% 64% 64% 65% 65%
Total Operating Expenses $5,054,904 $3,206,221 $3,288,660 $3,374,580 $3,462,927 $3,552,437 EBITDA ($2,543,152) ($378,676) ($96,054) $13,855 $215,672 $271,676 % of Revenue -101% -8% -2% 0% 4% 5%
Debt Service ($541,635) ($541,635) ($542,316) ($542,416) ($546,936) ($546,936) Capital Replacement ($54,900) ($54,900) ($54,900) ($73,200) ($73,200) Cost Recovery (including Debt/Bond Payment) 45% 82% 88% 90% 93% 94% Total Net Income ($3,084,787) ($975,211) ($693,270) ($583,461) ($404,464) ($348,460) Return on Equity
DRAFT
-2.3% -1.6% -1.4% -0.9% -0.8%
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 66, Packet Page 73

FINANCIAL ANALYSIS AND FIVE-YEAR OUTLOOK
5757

2. Fee Increases
§ Sports/Gym programs – youth programming includes a 10% fee increase over the five-year period; basketball includes a 15% fee increase over the five years; volleyball includes a 15% increase over the five-year period with the increases suggested for Yrs 3 and Yrs 5 after new programs are established.
§ Memberships include a 10% fee increase in all categories spread over the five-year period.

SFA recommends a 5% increase in Yr2 and a 5% increase in Yr4. § Aquatics includes a 10% fee increase in all categories spread over the five-year period. SFA recommends a 5% increase in Yr2 and a 5% increase in Yr4.

3. New Revenue Opportunities
§ Sports/Gym programs -youth programming includes the implementation of a new kindergarten half-day camp beginning in YR1; basketball includes the addition of a fall adult basketball league; volleyball includes a new fall volleyball league, as well as skills clinics. § Vending/Concessions – SFA recommends exploring full-service vending contracts for a limited number of health conscious/nutrition vending machines. This will provide members a benefit during times when concessions are unavailable or closed. § Tenant revenue – SFA recommends leasing the quad of offices for a complimentary medical/therapy/wellness provider. This may include a physical therapist, individualized sports training, massage therapy, or similar health and wellness focused provider. This revenue would be on a yearly SF basis.
§ Media/advertisement/sponsorship income – SFA recommends exploring digital and static sponsorship opportunities for spaces within the MSC. Secondary media/advertising/sponsorship could enhance the annual revenue of the MSC more than $50,000 annually.

DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 67, Packet Page 74 58 Aligning the goals and desired outcomes of the Monterey Sports Center with the net benefits of optimization and the projected implementation timeline enables the City of Monterey the opportunity to analyze facility and program performance, support achievements, and redirect/adjust/adapt the project team to accommodate for any delays.

While the economic benefit of optimization is noted in the various pro forma models, the direct and indirect benefits of improving programs, leagues, events, and aquatic offerings have an impact on the health and wellness of the community. The chart of the following page notes the goals/definitions of success of optimization and tangible and intangible benefits of each goal. Goals that may take place over a period of years will need regular monitoring to determine effectiveness and possibility scalability to produce the best long-term results.

IMPLEMENTATION OVERVIEW
58 IMAGE
58 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 68, Packet Page 75 59 NET BENEFITS
Understanding and aligning the net benefits with the definitions of success is an important part of the process of optimization, as the return on each of the investments/recommendations noted throughout this report can be correlated to one or more of the definitions of success. While tangible benefits are important to gauge the return on investment in for forms of programs and services offered, intangible benefits can have long-term impacts on the community.

IMPLEMENTATION OVERVIEW
5959
Tangible Intangible
Increased social
cohesion and
community
relationships
Improved mental
health
Competitive edge will
allow more compeitive
pricing and services
Improved customer
experiece & member
loyalty
High standards for
fitness &
wellness/Area leader
Improved community
image/brand
Increase profitability,
greater efficiency, cost
savings in operations
Enhanced
organizational
capacity to be agile
and responsive to
changes and
customers
Project Goals/Definitions of Success
Implement strategies to improve the financial performance of the Monterey Sports Center to reduce reliance on the general fund, while diversifying and expanding revenue opportunities.

Ensure that the Monterey Sports Center provides first-class customer fitness, wellness, and recreation experiences, while embracing community diversity through accessible, affordable membership options.

Develop strategies that will embrace existing and new opportunities to enable the Monterey Sports Center to continue to be the area’s leader for fitness and wellness.

Net Benefits
Increased demand for
services correlated with
increase in participation,
improved brand
recognition and visibility
Physically Healthier
Monetery Community
(decreased health
conditions)
Multiple income sources
may contribute to reduced
financial risk & subsidy
Improved market
opportunity for
enhanced services and
offerings
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 69, Packet Page 76 60 IMPLEMENTATION OVERVIEW

IMPLEMENTATION TIMELINE
Implementation details noted below are for each of the organizational/staffing recommendations noted throughout this report. The following summarizes the recommendations for organizational optimization. 6060
Optimization
Category Recommendations Task
Projected Time to
Implement/Accomplish
Task
Add: Assistant Sports Center Manager 1-5 years: Align with Growth of Programs & Membership
Add: Front Desk Specialist
1-2 yrs: Assess with
implementation of SmartRec and
Self Check-In Kiosks
Reclassify: Fitness Supervisor to Wellness Supervisor Align with Budget Year as Feasible
Reclassify: Facility Coordinator to Membership Coordinator Align with Budget Year as Feasible
Add: Part-Time Temporary Instructors for Group Exercise Classes
ASAP after assessment and
approval of legal counsel &
contract development
Add: Contract Fitness Instructors and Trainers
ASAP after assessment and
approval of legal counsel &
contract development
Add: Contract Sports Performance Trainers
ASAP after assessment and
approval of legal counsel &
contract development
Add: Contract Facility Attendants/Custodial
1 yr: Develop, issue, and award
RFP/Contract per City
Procurement Policy
Retain Instructor and Lifeguard Staff Through Incentives Offer: Certification reimbursement for specialzed certifications (trainers, lifeguards, swim instructors) at 50% if employed for 6- months and 100% if employed for 12-months.

ASAP: After approval from City
Leadership, HR, etc.

Expand Full-Time Positions to Coordinate and Support Expanding Programs and Services
Explore and Expand Part-time Temporary & Contract Positions Organizational Recommendations
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 70, Packet Page 77 61 IMPLEMENTATION OVERVIEW

IMPLEMENTATION TIMELINE
The following summarizes the recommendations for operational recommendations noted throughout the report.. 6161
Optimization
Category Recommendations Task
Projected Time to
Implement/Accomplish
Task
Develop dedicated budget for each program and event and include a robust cost of goods sold Utilize SmartRec financial reporting by program code In-Progress Annual Review of Membership and Program Fees
Conduct Annual review to ensure all Membership & Program Fees are Market Competitive/Transition to auto-debit/ACH for all memebrships with 30-day cancellation policy
In-Progress
Monthly Tracking of Expenses Utilize SmartRec system to review real-time spending ASAP: SmartRec Continue Facility Enhancement Fee Retain established 5% Facility Enhancement fee In-Progress Transparent Accounting of All Discount Rates Establish each discount intentionally and on a calendar basis, targeting discounts to intendend markets
Include in Budget Process to set
Maximum Discount Amount for the
Year
Budget Accountability
Engage all division managers in financial tracking and
reforecasting exercises. Hold division coordinators responsible for revenue and expense goals.

In-Progress
SmartRec - Implement and Utilize Transition from RecTrac to SmartRec and utilize all functional capabilities off the system In-Progress
Establish Annual Marketing Goals, Programs, Etc. Target Gen Z and Millenials to grou adult membership base ASAP Establish on-going customer survey process & schedule Utilize SmartRec system to push-out program and facility/member surveys ASAP: SmartRec
Implement Annual Net promoter Score Survey Utilize members and capacity in SmartRec system for annual survey 1 Year (Fall 2023/Winter 2024)
Modify Hours of Operation
Expand hours to increase morning and evening hours. Transition from 88.5 total hours per week to 100 (new hours 5:30am - 9:30pm M-F, 8am -6pm Sat & Sun)
1-5 years: Align with Budget
Capacity
Restructure and Restart Child Watch/KidsZone on a Trial Basis Implement modified KidsZone Hours - 30 Hrs per week.

Consider including in family membership as a way to drive new members.
1-5 years: Align with Budget
Capacity
Review and Update Polices, Procedures, Membership Documents, etc. Conduct annual review of all documents to ensure legal compliance with current rules, regulations, and restrictions. In-Progress Explore potential to utilize vacant office spaces as lease space for a medical, therapy, or wellness provider
Consult with Commercial Real Estate Professional to determine viability of space
3 months - 1 year (Potential to
include in FY23-24 revenue or
sooner)
Implement Facility Sponsorship/Advertsing Campaign Work collectively with City leadership and City marketing team to develop yearly calendar, deliverables, and timeline
1 yr: Develop, issue, and award
RFP/Contract per City
Procurement Policy
Explore MSC Endowment Fund Consult legal counsel ASAP: After approval from City Leadership, legal, etc.

Consider Outsourced Management
Explore potential to reduce costs associated with fully burdened benefits, indrect costs, and service/contracts managed by other departments
6 mos. -1 yr: Develop, issue, and
award RFP/Contract per City
Procurement Policy
Operational Recommendations
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 71, Packet Page 78 62 IMPLEMENTATION OVERVIEW

IMPLEMENTATION TIMELINE
The following summarizes the recommendations for programming recommendations noted throughout the report..
6262
Optimization
Category Recommendations Task
Projected Time to
Implement/Accomplish
Task
Programming: Grow Sports/League/Camp Enrollment Incremental program grown and adding new lplayers and eagues
ASAP: Utilize target marketing to
grow program participants
Expand to Non-Traditional Recreation Clubs - Cycling, Running, Paddle Grow additional members by expanding program offerings with contract instructors
Contingent Upon Contract
Instructors or Additional PT staff/
Transition to Wellness Coordinator
to coordinate and supervise
Expand Aquatics Programs - Youth Swim Team, Masters Swim, Aqua Rehab Utilize additional open pool time to grow new programs Contingent Upon Expansion of Hours Utilize Early Opening and Later Closing times to develop Master Swim and increase lap lane rental Utilize additional open pool time to grow new programs Contingent Upon Expansion of Hours Increase group swim lessons to generate more revenue per 30-minute class
Assess and align swim lesson strategies to include more group lessons
Assess ASAP and include within 6
months if viable
Extend Fitness Assessment and Orientation to all new members as a benefit of membership Include in marketing material for new members In-Progress Monitor Class Attendance Utilize SmartRec capabilities to ensure class participation to tracked ASAP: SmartRec
Utilize Gym during non-peak Sports Hours for larger class that may exceed capaity of Group X room
Assess class participation and use facility utilization component of SmartRec to determine best location based on capacity and attendance
ASAP: SmartRec
Utilize Sundeck for Group X Programs During Seasonable Times Contingent upon weather and class participation Contingent Upon Weather Explore added benefits to fitness training - i.e. massage chairs Before FY23-24 budget request 6 mos. - 1 year Teen Area - consider use of KidsZone after hours to host teen specific programs
Assess KidsZone participation and use facility utilization component of SmartRec to determine best location based on capacity and attendance
1-5 years: Align with Budget
Capacity
Programming
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 72, Packet Page 79 63 IMPLEMENTATION OVERVIEW

IMPLEMENTATION TIMELINE
The following summarizes the recommendations for facility recommendations noted throughout the report. 6363
Optimization
Category Recommendations Task
Projected Time to
Implement/Accomplish
Task
Conduct aquatics condition assessment in addition to FY23 CIP resurfacing and dehumidifier
Ensure that operating systems of aquatic facility are functioning tocapacity 6mos. - 1 year
Conduct HVAC and Ventilation assessment Conduct audit of internal ventilation and air quality 1-5 years: Align with Budget Capacity
Conduct Energ Audit Conduct audit of energy usage, building conditions, and potential energy savings
1-5 years: Align with Budget
Capacity
Assess best location to accommodate contract vending Contract with healthy vending options 6 mos. -1 yr: Develop, issue, and
award RFP/Contract per City
Procurement Policy
Locate SmartRec Kiosks by Front-Desk to allow for self-check-in Establish hardware needed to accommodate self check-in feature in SmartRec ASAP: SmartRec
Transition to Leased Cardio Equipment Transition 1/3 of cardio equipment to lease each year for 3 years. 1-5 years: Align with Budget Capacity
Line Gym Floor for Primary Sports, Use Tic Marks for Secondary Sports Resurface and reline gymnasium floor Complete Place Cardio and Selectorized Equipment together for consistency and flow during training
Assess equipment location and move as space allows for best possible flow and equipmentdistancing requirements
6 mos. - 1 year: Consider movign
equipment after new equipment
purchase for FY22-23
Music: Ensure individual music experiences on fitness equipment via Bluetooh & USB capabilities)
Check ports monthly to ensure that they are working. Cover ports during period of replacement. ASAP
Television/Digital Displays: Broadcast local news, sports, or other nonpolitical programming without volume and captions turned onRelay television broadcasting policy to all staff and ensure compliance. In-Progress
Facility Recommendations
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 73, Packet Page 80 64 Based on the work completed to date, SFA believes that an opportunity exists for the Monterey Sports Center to continue to be the area’s leader for fitness and wellness while improving the financial performance to reduce the reliance on the general fund. SFA has outlined recommendations to enhance and optimize the organization, operations, programs, and the facility, including:
§ Pricing and Revenue Generation
§ Cost Containment
§ Business Development
§ Efficiencies within the Organizational and Operational Structures § Improvements and Expansion of Programs
It should be noted that throughout this process SFA has identified a significant number of strengths within operations, financial performance, the quality of the facility, and the customer experience. That said, as a report that is focused on the optimization of Monterey Sports Center, this document focuses heavily on opportunities for improvement and does not identify or address the many effective and successful team members, policies, and results that will allow the Monterey Sports Center to thrive in the future.

While the work done to date has qualified the opportunities and enabled SFA to make the insights and recommendations to enhance revenue and operations of the MSC, there will need to be a concentrated and unified effort on behalf of all MSC and Monterey Parks and Recreation staff to increase participation, reduce expenses, and identify viable program partners, sponsors, and donors. SFA welcomes the opportunity to review the findings within this report with the Monterey Sports Center leadership team and assist in the development of the strategy to implement the optimization strategies.
64 IMAGE
64 CONCLUSION AND NEXT STEPS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 74, Packet Page 81

ADVISORY DEVELOPMENT MANAGEMENT

ABOUT THE SPORTS FACILITIES COMPANIES
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 75, Packet Page 82 66 66
$15 Billion IMPROVE THE

HEALTH & ECONOMIC

VITALITY OF THE

COMMUNITIES

IN PLANNED & FUNDED FACILITIES

OUR MISSION

VISITS AT SFM FACILITIES
3000
25 Million

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ABOUT THE SPORTS FACILITIES COMPANIES
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 76, Packet Page 83 67 67

ABOUT THE SPORTS FACILITIES COMPANIES
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 77, Packet Page 84 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 78, Packet Page 85 APPENDIX – LOCAL DEMOGRAPHIC AND SOCIOECONOMIC DATA
2022 Total Family Households (Esri) 15,961 25,954 55,887 2022 Average Household Size (Esri) 2.38 2.45 2.78
2017-2022 Per Capita Income: Annual Growth Rate (Esri) 3.71 3.47 3.33 2022 Total Households (Esri) 28,680 43,471 86,468
2017-2022 Population: Annual Growth Rate (Esri) -0.06 0.08 0.12 2017-2022 Median Household Income: Annual Growth Rate (Esri) 2.96 2.81 3.18 2022 Household Population (Esri) 68,276 106,505 240,688 2010-2017 Population: Annual Growth Rate (Esri)
2022 Average Household Income (Esri) $130,556 $132,208 $125,167 2022 Per Capita Income (Esri) $52,347 $51,257 $43,438
2022 Median Age (Esri) 39.4 38.7 36.6
2022 Median Household Income (Esri) $93,403 $93,631 $88,243 Total Population 73,110 114,442 250,932
Demographic Highlights 10 minutes 15 minutes 30 minutes 2022 Household Income $200,000 or greater (Esri) (%) 15.40% 15.80% 14.40% 2022 Household Income $100,000-$149,999 (Esri) (%) 21.60% 21.30% 20.30% 2022 Household Income $150,000-$199,999 (Esri) (%) 9.70% 9.70% 9.00% 2022 Household Income $50,000-$74,999 (Esri) (%) 13.00% 13.10% 14.00% 2022 Household Income $75,000-$99,999 (Esri) (%) 15.10% 15.40% 16.00% 2022 Household Income $25,000-$34,999 (Esri) (%) 5.70% 5.40% 5.60% 2022 Household Income $35,000-$49,999 (Esri) (%) 8.20% 8.20% 8.90% 2022 Household Income less than $15,000 (Esri) (%) 4.60% 5.00% 5.10% 2022 Household Income $15,000-$24,999 (Esri) (%) 6.50% 6.20% 6.80% Household Income Breakdown 10 minutes 15 minutes 30 minutes 2022 Total Population Age 85+ (Esri) (%) 3.16% 3.03% 2.45% 2022 Total Population Age 18+ (Esri) (%) 82.21% 81.55% 77.81% 2022 Total Population Age 75-79 (Esri) (%) 3.67% 3.64% 3.15% 2022 Total Population Age 80-84 (Esri) (%) 2.43% 2.49% 2.06% 2022 Total Population Age 65-69 (Esri) (%) 5.94% 5.97% 5.38% 2022 Total Population Age 70-74 (Esri) (%) 5.16% 5.10% 4.43% 2022 Total Population Age 55-59 (Esri) (%) 5.88% 5.81% 5.78% 2022 Total Population Age 60-64 (Esri) (%) 6.35% 6.37% 6.06% 2022 Total Population Age 45-49 (Esri) (%) 5.20% 5.01% 5.13% 2022 Total Population Age 50-54 (Esri) (%) 5.45% 5.31% 5.39% 2022 Total Population Age 35-39 (Esri) (%) 7.28% 6.77% 6.68% 2022 Total Population Age 40-44 (Esri) (%) 5.91% 5.53% 5.66% 2022 Total Population Age 25-29 (Esri) (%) 7.72% 7.63% 7.70% 2022 Total Population Age 30-34 (Esri) (%) 7.54% 7.26% 7.33% 2022 Total Population Age 15-19 (Esri) (%) 5.54% 6.55% 6.59% 2022 Total Population Age 20-24 (Esri) (%) 7.78% 8.06% 7.55% 2022 Total Population Age 5-9 (Esri) (%) 5.05% 5.21% 6.25% 2022 Total Population Age 10-14 (Esri) (%) 4.90% 4.98% 6.07% Age Breakdown 10 minutes 15 minutes 30 minutes
2022 Total Population Age 0-4 (Esri) (%) 5.06% 5.28% 6.35% 30 minutes
345.37
158.46
203.79
2022 Camp Fees (Avg) 42.83 43.61 40.39
2022 Fees for Participant Sports excluding Trips (Avg) 164.76 168.23 2022 Fees for Recreational Lessons (Avg) 209.85 210.62
Spending: Recreation 10 minutes 15 minutes
2022 Membership Fees for Social/Recreation/Civic Clubs (Avg) 367.69 369.78 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 79, Packet Page 86 APPENDIX – LOCAL DEMOGRAPHIC AND SOCIOECONOMIC MAPS
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 80, Packet Page 87 APPENDIX – REGIONAL DRIVETIME MAP
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 81, Packet Page 88 APPENDIX – LOCAL FACILITIES
Indoor Court Facilities
Drive
Time
(Minutes)
Monterey High School 4
Trinity Christian High School 4
Santa Catalina School 7
Monterey Pinensula College 7
Pacific Grove High School 9
Seaside High School 12
CSUMB Gymnasium (Kelp Bed) 13
Carmel Middle School 13
Marina High School 14
All Saints Day School 17
San Bancio Middle School 19
North County Recreation and Park District 20
Palma School 26
Notre Dame High School 26
Buena Vista Middle School 26
Salinas High School 27
Salinas Recreation Center 28
Pajaro Valley High School 31
Rancho San Juan High School 32
Watsonville High School 34
Watsonville Family YMCA 34
Harden Middle School 34
Everett Alvarex High School 35
North Salinas High School 35
EA Hall Middle School 36
Anzar High School 36
Aromas High School 36
Alisal High School 36
Aptos High School 38
Aptos Junior High School 38
La Paz Middle School 39
St. Francis High School 41
Monte Vista Christian School 42
Cabrillo College 42
Gonzales High School 43
San Benito High School 48
Christopher High School 52
Soledad Community Center 54
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 82, Packet Page 89 APPENDIX – LOCAL FACILITIES
Camp Provider Facilities Drive Time
(Minutes)
YMCA of Monterey Peninsula 3
Lyceum of Monterey County 4
Tumble by the Sea 9
Carmel Youth Center 11
Marina Recreation Department 14
North County Recreation and Park District 20
Carmel Valley Community Youth Center 26
Salinas Rec Center Gym 28
Salinas Community YMCA 28
Gene Hoularis and Waldo Rodriquez Youth Center 32
Watsonville Family YMCA 34
Four Points Youth Camp 38
Indoor Aquatics Facilities Drive Time
(Minutes)
Kernes Adaptive Aquatics 7
Monterey Aquatic Therapy Center 8
In-Shape Health Club 9
Patullo Swim Center 10
Salinas Community YMCA 28
In-Shape Health Club 28
Salinas Aquatic Center / Central Coast YMCA 31
Montage Wellness Center 33
Jim Booth Swim School 34
Rovellas Gym and Health Spa 51
Soledad Mission Recreation Center 53
Fitness-YMCA Facilities Drive Time
(Minutes)
STRENGTH 2
YMCA of Monterey Peninsula 3
Anytime Fitness 3
Get Well with Danielle 4
Richard Russel CrossFit Monterey Bay 6
Golds Gym 6
Naval Post Graduate School 7
First City Crossfit 7
Neighborhood 813 Strength and Conditioning 7
Elketron 8
NOFFS Zone 8
In-Shape Health Clubs 9
Anytime Fitness 9
Price Fitness Center 9
The Camp Transformation Center - Monterey 10
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 83, Packet Page 90 APPENDIX – REGIONAL FACILITIES
Indoor Court Facilities Drive Time
(Minutes) Assets/Amenities
NorCal Courts 123 3 BB courts
Courtside Basketball Center 196
5 hardwood BB courts -
36,000sf facility with food court
Dignity Health Sports Complex
219
5 BB courts, weight room, 3
classrooms, industrial kitchen,
pro shop, Pixellot automated
cameras
Mamba Sports Academy
281
5 BB, 5 VB, 2 beach VB courts,
turf field, combat/self-defense
dojo, sports medicine center,
biomechanics lab, cognitive
training lab, esports training
space, batting cages, and
mondo sprint track
American Sports Center
345
25 BB, 34 VB courts/9 indoor
futsal courts - 242,000sf facility,
restaurant, full-service food
court, café, pro shop
The Map Sports Facility 345 8 BB courts
Momentous Sports Center 353
21 BB/ 22 VB courts (2 NBA, 3
hoops can lower)
Ladera Sports Center 371 8 BB courts
Alliant University Sports Center 427 6 BB/12 VB courts
DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 84, Packet Page 91 APPENDIX – REGIONAL TOURNAMENTS AND EVENTS (SAMPLE)
Facility Tournament Type Tournament Name City State Games Dates Price Teams American Sports Centers Basketball 2018 EBC Jr. All-American Camp Anaheim, CA 3 min 8/3-5/18 56 American Sports Centers Basketball Summer Showdown Anaheim, CA 3 min 8/18-19/18 101 American Sports Centers Basketball Fall Kickoff Anaheim, CA 3 min 9/22-23/18 200+ American Sports Centers Basketball October Hoopfest Anaheim, CA 3 min 10/6-7/19 27 American Sports Centers Basketball West Coast Invitational Anaheim, CA 3 min 11/10-11/18 $275-
$300
each
team
109
American Sports Centers Basketball Winter Challenge Anaheim, CA 3 min 12/15-16/18 $300-
$325
each
team
Bakersfield Christian High School Basketball Back to School Showcase Bakersfield, CA 3 min 8/13-9/21/19 $200-
$250
each
team
Get it Done Sports Arena Basketball AAU Halloween Corona, CA 3min 10/13-14/18 $250
each
team
61 Get it Done Sports Arena Basketball Indi-West Qualifier: MLK Living the Dream Invitational Corona, CA 4 min 1/19-21/19 $295
each
team
Get it Done Sports Arena Basketball For the Love of the Game Corona, CA 3 min 2/9-10/19 $225-
$250
each
team
Get it Done Sports Arena Basketball IE Got Buckets Showcase Corona, CA 3 min 3/2-3/19 $250
each
team
The Map Sport Facility Basketball The Swoosh Summer Jam Garden Grove, CA 3 min 8/3-4/19 $100-
$325
each
team
86 The Map Sport Facility Basketball Tournament of Champions Garden Grove, CA 3 min 8/4-5/18 50 The Map Sport Facility Basketball Get Buckets Tournament Garden Grove, CA 8/11-12/18 $250
each
team
Santiago High School Basketball End of the Season Showcase Garden Grove, CA 8/18-19/18 29 The Map Sport Facility Basketball West Coast Challenge Garden Grove, CA 3 min 8/25-26/18 $250-
275
each
team
The Map Sport Facility Basketball Breast Cancer Awareness/Ballin for the Cure Garden Grove, CA 3 min 10/20-21/18 $250-
$275
each
team
The Map Sport Facility Basketball Veteran's Appreciation Tip-Off Tournament Garden Grove, CA 3 min 11/10-11/18 $250-
$275
each
team
The Map Sport Facility Basketball WInter Classic Tournament Garden Grove, CA 3 min 12/29-30/19 $250-
$275
each
team
The Map Sport Facility Basketball The New Year Challenge Garden Grove, CA 3 min 1/12-13/19 $275-
$300
each
team
Momentous Sports Center Basketball Summer Jam Irvine, CA 3 min 8/10-11/19 Momentous Sports Center Basketball ABF Fall Classic Irvine, CA 3 min 8/15-16/18 $250-
$275
each
team
Momentous Sports Center Basketball 6th Annual West Coast All-Star Challenge Irvine, CA 3 min 9/15-16/18 $250-
275
each
team
30 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 85, Packet Page 92

FIVE-YEAR OPERATING PRO FORMA
PREPARED FOR: THE CITY OF MONTEREY, CA
D R AFT REPOR T DELI VERY DATE: APRIL 2023

IMPROVING COMMUNITIES THROUGH SPORT

THIS PROJECT IS REPRESENTED BY

FOR MORE INFORMATION VISIT
WWW.SPORTSFACILITIES.COM
ATTACHMENT 2
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 86, Packet Page 93 Facility Program Details 2
Facility Program 3
Financial Performance Summary 4
Total Revenue and Expenses - 5-Year Detail 5
Business Unit Analysis 6
Overhead Expenses 17
Facility Expenses 18
Operating Expenses 19
Management Payroll 20
Payroll Taxes and Benefits 21
Table of Contents
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 87, Packet Page 94 1 Facility Program Details
2 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 88, Packet Page 95 Indoor Athletic Facility

L (') W (')
Gymnasium 1 - - 13,925 13,925 19.5%
Gymnasium Storage 1 - - 860 860 1.2%
Total Gymnasium Sq. Ft. 14,785 20.7%
Cardio Fitness Center 1 - - 3,360 3,360 4.7%
Therapeutic and Assessment Center 1 - - 1,290 1,290 1.8% Fitness Maintenance Shop 1 - - 305 305 0.4%
Weight Training Center 1 - - 3,281 3,281 4.6%
Women's Restrooms/Lockers 1 - - 353 353 0.5%
Men's Restrooms/Lockers 1 - - 341 341 0.5%
Women's Locker/Shower Room 1 - - 1,660 1,660 2.3%
Men's Locker/Shower Room 1 - - 1,490 1,490 2.1%
Kid's Zone (Babysitting) 1 - - 916 916 1.3%
Fitness Studio I 1 - - 2,209 2,209 3.1%
Fitness Studio II 1 - - 1,634 1,634 2.3%
Total Fitness Center Sq. Ft. 16,839 23.6%
Pool Natatorium/Deck Space 1 - - 19,860 19,860 27.9%
Natatorium Storage 1 - - 315 315 0.4%
Aquatics Offices 1 - - 280 280 0.4%
Total Aquatics Sq. Ft. 20,455 28.7%
Lobby/Recreation Area 1 - - 1,570 1,570 2.2%
Concourse 1 - - 5,382 5,382 7.6%
Sun Deck 1 - - 5,445 5,445 7.6%
Maintenance Shop 1 - - 434 434 0.6%
Snack Bar/Pro Shop Area 1 - - 435 435 0.6%
Office Area 1 - - 633 633 0.9%
Conference Room/Sun Deck 1 - - 1,538 1,538 2.2%
Total Flex Space Sq. Ft. 15,437 21.7%
67,516 94.8%
3,020 4.2%
719 1.0%
71,255 100%
60,628

1.39 Site Development

L (') W (')
Parking Spaces Total (10'x18')
(20' x 20' Inc. aisles) 286 20 20 400 114,400 72.3%
Setbacks, Green Space, Trails, etc. 43,757 27.7%
158,157 100%

3.63 5.02
Total Site Development Acreage
Parking
Spaces
Total
25% Indoor SF, 50% Outdoor
Total Complex Acreage
Quantity Dimensions Approx.

SF each Total SF
Total Estimated Site Development SF
% of Total
Total SF % of Footprint Approx.

SF each
Required SF for Products and Services
Gymnasium
Facility Program
Space Indoor Programming Product/Service Count Dimensions Estimated Building Footprint
Support/Mechanical
Fitness Center Aquatics Flex Space
Total Estimated Indoor Athletic Facility SF
Miscellaneous Space
Total Building Acreage
3 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 89, Packet Page 96 Financial Performance Summary
4 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 90, Packet Page 97 Total Revenue & Expenses
Revenue Year 1 Year 2 Year 3 Year 4 Year 5
Basketball $61,710 $64,706 $74,636 $77,794 $85,144
Volleyball $11,130 $12,799 $15,498 $15,992 $18,018
Fitness and Training $132,840 $135,497 $149,385 $156,854 $164,697 Membership Fitness Area $3,277,632 $3,674,222 $3,856,208 $4,178,684 $4,310,765 Enhancement Facility Fee $162,682 $182,451 $191,487 $207,572 $214,135 Aquatics $398,700 $412,605 $444,539 $456,154 $491,496
Youth Programming $244,841 $257,083 $283,434 $297,606 $328,111 Food & Beverage $9,515 $9,989 $10,473 $10,816 $11,175
Retail $7,700 $9,240 $10,164 $10,977 $11,855
Tenant Revenue $151,200 $157,248 $163,538 $170,079 $176,883 Secondary Revenue $50,000 $55,000 $60,500 $66,550 $73,205 Total Revenue $4,507,950 $4,970,839 $5,259,863 $5,649,080 $5,885,483 Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Basketball $19,545 $20,480 $22,544 $23,486 $25,117
Volleyball $6,076 $6,954 $7,966 $8,243 $8,987
Fitness and Training $75,719 $77,233 $85,150 $89,407 $93,877 Membership Fitness Area $1,053,525 $1,134,722 $1,197,061 $1,276,180 $1,339,237 Enhancement Facility Fee $0 $0 $0 $0 $0
Aquatics $407,534 $413,677 $421,210 $427,869 $434,642
Youth Programming $101,272 $106,335 $116,781 $122,620 $134,688 Food & Beverage $0 $0 $0 $0 $0
Retail $4,235 $5,082 $5,590 $6,037 $6,520
Tenant Expense $0 $0 $0 $0 $0
Secondary Expense $12,500 $13,750 $15,125 $16,638 $18,301 Total Cost of Goods Sold $1,680,405 $1,778,233 $1,871,427 $1,970,480 $2,061,370 Gross Margin $2,827,545 $3,192,606 $3,388,436 $3,678,599 $3,824,113 % of Revenue 63% 64% 64% 65% 65%
Facility Expenses $755,644 $766,933 $778,392 $790,023 $801,829 Operating Expense $713,941 $726,059 $738,443 $751,103 $761,810 Management Payroll $803,482 $835,621 $869,046 $903,808 $939,961 Payroll Taxes/Benefits $933,154 $960,046 $988,698 $1,017,993 $1,048,838 Total Operating Expenses $3,206,221 $3,288,660 $3,374,580 $3,462,927 $3,552,437 EBITDA ($378,676) ($96,054) $13,855 $215,672 $271,676
% of Revenue -8% -2% 0% 4% 5%
Debt Service ($541,635) ($542,316) ($542,416) ($546,936) ($546,936) Capital Replacement ($54,900) ($54,900) ($54,900) ($73,200) ($73,200) Total Net Income ($975,211) ($693,270) ($583,461) ($404,464) ($348,460) 5 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 91, Packet Page 98 Business Unit Analysis
6 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 92, Packet Page 99 Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Instructional Clinics $/Session *1 $165 $165 $182 $182 $191 12 15 16 17 17 18 2 $4,950 $5,198 $6,003 $6,264 $6,863 Individual Instruction $/Hour *3 $50 $50 $55 $55 $58 - 8 8 9 9 10 12 $4,800 $5,040 $5,821 $6,074 $6,655 Rentals
Sports Parties $/Session *4 $300 $300 $330 $330 $347 1 1 1 1 1 1 6 $1,800 $1,800 $1,980 $1,980 $2,079 League
Dec. - Feb. League (Youth) $/Team *6 $1,890 $1,890 $2,079 $2,079 $2,183 24 24 25 26 28 29 1 $45,360 $47,628 $55,010 $57,401 $62,891 Sept. - Nov. League (Adult) $/Team $800 $800 $880 $880 $924 - 6 6 7 7 7 1 $4,800 $5,040 $5,821 $6,074 $6,655

1.00 1.10 1.00 1.05 1.00 1.05 1.05 1.04 1.04

1.10 1.10 1.10 1.10 1.00 1.00 1.00 1.00
$61,710 $64,706 $74,636 $77,794 $85,144
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Basketball Director Responsibility of Management Team $0 $0 $0 $0 $0 Basketball Staff 5% Gross Revenue $3,086 $3,235 $3,732 $3,890 $4,257 Referee Fees Avg. $45/Game $9,072 $9,526 $10,002 $10,437 $10,890 Instructor Fees $25/Hr per Employee $2,438 $2,559 $2,956 $3,085 $3,380 Sports Party Staff 2 Hrs Party plus set-up, clean-up, $17.5/Hr. per Employee $630 $630 $630 $630 $630 Equipment and Supplies 5% Gross Revenue $3,086 $3,235 $3,732 $3,890 $4,257 Awards 2% Gross Revenue $1,234 $1,294 $1,493 $1,556 $1,703 $19,545 $20,480 $22,544 $23,486 $25,117
$42,165 $44,226 $52,092 $54,307 $60,027
Pricing Notes Clinics Camps Inidividual Instruction
*1 Salinas Rec Center Gym *2 Salinas Valley Washington MS Basketball Camp Cutino Recreation Center - Summer Camp *3 USA Basketball - VW (Various Locations) $40 / 5 1.5 hour sessions $295 / 5 days $42 / 5 days $120 / 1 hour Campbell Community Center Skyhaws BB Camp Oldemeyer Recreation Center Kids Camp Sub Zero Hoops (San Jose) - Various Locations $309 / 5 full days $59 / 4 full days $200 / 1.5 hours
MPC Gymnasium Lobos Camp Monterey Sports Center BTB Camp Fundamental MW Training Various Locations $125 / 5 half days $225 / 3 full days $75 / 1 hour
CSMB - Otter Sports Center Chartwell School Skills Camp Monterey Sports Center $65 / 3/4 day camp $450 / 4 days $50/private lesson
*4 TAG Adventure Park Club Teams
$100 / 1 hour *5 GBA Select 7th Grade (Various Locations) *6 Leagues $450 / 10 weeks Salinas Recreation Center Summer 2022 League Monterey Lanes Pizza Bowl Party $65 / 6 weeks
$340 / hours / 20 people GBA Select Varsity (Various Locations) $450 / 10 weeks Seaside PAL Youth League - Various Locations The Little Gym Awesome Birthday Bash $10 / 5 weeks (charity organization) $319 / 1.5 hours / 15 people Motiv8 AAU (Various Locations) $500 / 10 weeks San Jose YBL - Various Locations
The Little Gym Royal Prince/Princess $890 / 10 weeks - price/team (including ref fees) $349 / 2 hours / 15 children AAU SJ Falcons 7-9th Grade (Various Locations) $1,000 / 16 weeks Moreland West Community Center Fall Adult Mens MBL Monterey Sports Center $700 / 8 week - price/team (including ref fees) $300/2 hours
$350/2 hours with WIBIT obstacle course Monterey Sports Center $185/youth basketball league
Non-Capacity Growth Rate
Capacity growth rate
Total Revenue
Total Cost of Goods Sold
Net Revenue
Management Assumption
Basketball Revenue & Expenses
Program Fees Number of Registrations Sellable
Sessions Revenue Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Council Special Meeting, 5/24/2023, Item No. 2., Item Page 93, Packet Page 100 DRAFT 7
Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Instructional Clinics $/8 Wk Session $80 $80 $88 $88 $92 12 12 14 15 16 17 2 $1,920 $2,240 $2,640 $2,816 $3,142 Individual Instruction $/Hour $50 $50 $55 $55 $58 6 6 7 8 8 9 12 $3,600 $4,200 $5,280 $5,280 $6,237 League
Sept. - Oct. Leagues $/Team $374 $374 $411 $411 $432 - 5 6 6 6 7 1 $1,870 $2,120 $2,526 $2,632 $2,880 Jun. - Aug. League (HS) $/Team $374 $374 $411 $411 $432 5 5 6 6 6 7 1 $1,870 $2,120 $2,526 $2,632 $2,880 Mar. - May. League (Adult) $/Team $374 $374 $411 $411 $432 5 5 6 6 6 7 1 $1,870 $2,120 $2,526 $2,632 $2,880

1.00 1.10 1.00 1.05 1.13 1.08 1.04 1.04

1.10 1.10 1.10 1.10 1.00 1.00 1.00 1.00
$11,130 $12,799 $15,498 $15,992 $18,018
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Volleyball Director Responsibility of Management Team $0 $0 $0 $0 $0 Volleyball Staff 5% Gross Revenue $557 $640 $775 $800 $901 Referee Fees Avg. $40/Game $3,360 $3,808 $4,126 $4,299 $4,480 Instructor Fees 25% Instructor Revenue $1,380 $1,610 $1,980 $2,024 $2,345 Equipment and Supplies 5% Gross Revenue $557 $640 $775 $800 $901 Awards 2% Gross Revenue $223 $256 $310 $320 $360
$6,076 $6,954 $7,966 $8,243 $8,987
$5,054 $5,844 $7,532 $7,750 $9,031
Pricing Notes Clinics Camps Individual Instruction
*1 IMUA VB Club Clinic *2 Salinas HS VB Camp *3 Seasude VBC $60 / 3 - 2 hour sessions $125 / 4 half days $75 / 1 hour Camden Community Center Skyhawks VB Clinic Camden Community Center Skyhaws VB Camp Monterey Sports Center $115 / 4 sessions $209 / 5 days $50/ 1 hour
Aloha VBC Keiki Kids Clinic Seaside VBC Summer KO Camp Vision VBC $150 / 3 sessions $140 / 4 days $100 / 1 hour
BAVC 2022 Boys Youth Camp BAVC
$90 / 3 days $65 / 1 hour
Leagues Club Teams
*4 Salinas Recreation Center 2022 Youth VB League *5 Vision VBC Fall Youth $200 / 5 weeks $750/10 weeks
North County RandP District - Various Locations CCVC Fall 22-23 Indoor Club $550 / 6 weeks / team $800 / 14 weeks
Net Revenue
Total Cost of Goods Sold
Total Revenue
Management Assumption
Non-Capacity Growth Rate
Capacity growth rate
Volleyball Revenue & Expenses
Program Fees Number of Registrations Sellable
Sessions Revenue Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Council Special Meeting, 5/24/2023, Item No. 2., Item Page 94, Packet Page 101 DRAFT 8
Fitness & Training Revenue & Expenses
Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Personal Training - 1/2 Hour $/Session *1 $41 $41 $43 $43 $45 270 270 275 289 304 304 12 $132,840 $135,497 $149,385 $156,854 $164,697 Non-Capacity Growth Rate 1.00 1.05 1.00 1.05 1.00 1.02 1.05 1.05 1.00 Capacity growth rate 1.10 1.10 1.10 1.10 1.00 1.00 1.00 1.00 $132,840 $135,497 $149,385 $156,854 $164,697
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Fitness & Training - Personal Trainers 50% Personal Training, 25% Group Training $66,420 $67,748 $74,693 $78,427 $82,349 Equipment and Supplies 7% Gross Revenue $9,299 $9,485 $10,457 $10,980 $11,529 $75,719 $77,233 $85,150 $89,407 $93,877
$57,121 $58,264 $64,236 $67,447 $70,820
Pricing Notes Personal Training Sports Performance
*1 Hexbox Fitness Montage Wellness Center *2 Mann Training $299/20 sessions $299/5 sessions-Private Trail Training $35/1 hour $549/10 sessions- Private Basic Training $225/8 sessions CVAC
$85/1 session - member rate Monterey Sports Center Tech Pro Athletics $490/6 session - member rate $43/8 pack -$43 per 30 minute session $50/1 session $95/ 1 session - nonmember rate $41/12 pack $450/10 sessions $540/6 sessions - nonmember rate $39/16 pack
$37/20 pack
$85/1 hour session
Year 5
Total Revenue
Total Cost of Goods Sold
Net Revenue
Revenue Management Assumption
Program Fees Number of Registrations Sellable
Sessions Year 1 Year 2 Year 3 Year 4
Management Assumpion
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 95, Packet Page 102 DRAFT 9
Actual
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Memberships
Youth (9-12 Years) - Resident $/Month $31 $31 $33 $33 $35 $35 8 9 9 9 9 9 12 $3,348 $3,564 $3,564 $3,780 $3,780 Youth (9-12 Years) - Non-Resident $/Month $34 $34 $36 $36 $38 $38 - - - - - - 12 $0 $0 $0 $0 $0 Youth Annual - Resident $/Auto-pay $31 $31 $33 $33 $35 $35 9 10 11 12 12 12 12 $3,720 $4,356 $4,752 $5,040 $5,040 Youth Annual - Non-Resident $/Auto-pay $34 $34 $36 $36 $38 $38 2 2 2 2 2 2 12 $816 $864 $864 $912 $912 Youth Annual - Resident $/Year $334 $333 $350 $350 $368 $368 2 3 3 3 3 3 1 $999 $1,050 $1,050 $1,104 $1,104 Youth Annual - Non-Resident $/Year $371 $371 $390 $390 $410 $410 1 1 1 1 1 1 1 $371 $390 $390 $410 $410 Teen (13-17 Years) - Resident $/Month $33 $33 $35 $35 $37 $37 46 51 54 57 59 61 12 $20,196 $22,680 $23,940 $26,196 $27,084 Teen (13-17 Years) - Non-Resident $/Month $37 $37 $39 $39 $41 $41 12 13 14 15 15 15 12 $5,772 $6,552 $7,020 $7,380 $7,380 Teen (13-17 Years) - Resident $/Auto-pay $33 $33 $35 $35 $37 $37 56 62 65 68 70 72 12 $24,552 $27,300 $28,560 $31,080 $31,968 Teen (13-17 Years) - Non-Resident $/Auto-pay $37 $37 $39 $39 $41 $41 14 15 16 17 18 19 12 $6,660 $7,488 $7,956 $8,856 $9,348 Teen Annual - Resident $/Year $367 $367 $385 $385 $404 $404 25 27 28 29 30 31 1 $9,909 $10,780 $11,165 $12,120 $12,524 Teen Annual - Non-Resident $/Year $408 $408 $428 $428 $449 $449 6 7 7 7 7 7 1 $2,856 $2,996 $2,996 $3,143 $3,143 Adult (18-61 Years) - Resident $/Month $55 $55 $58 $58 $61 $61 348 383 402 422 435 448 12 $252,780 $279,792 $293,712 $318,420 $327,936 Adult (18-61 Years) - Non-Resident $/Month $61 $61 $64 $64 $67 $67 87 96 101 106 109 112 12 $70,272 $77,568 $81,408 $87,636 $90,048 Adult (18-61 Years) - Resident $/Auto-pay $55 $55 $58 $58 $61 $61 366 402 422 443 456 470 12 $265,320 $293,712 $308,328 $333,792 $344,040 Adult (18-61 Years) - Non-Resident $/Auto-pay $61 $61 $64 $64 $67 $67 91 101 106 111 114 117 12 $73,932 $81,408 $85,248 $91,656 $94,068 Adult Annual - Resident $/Year $601 $601 $631 $631 $663 $663 362 398 418 439 452 466 1 $239,198 $263,758 $277,009 $299,676 $308,958 Adult Annual - Non-Resident $/Year $668 $668 $701 $701 $736 $736 90 99 104 109 112 115 1 $66,132 $72,904 $76,409 $82,432 $84,640 Senior (62 & older) - Resident $/Month $41 $41 $43 $43 $45 $45 137 150 158 166 171 176 12 $73,800 $81,528 $85,656 $92,340 $95,040 Senior (62 & older) - Non-Resident $/Month $45 $45 $47 $47 $49 $49 34 38 40 42 43 44 12 $20,520 $22,560 $23,688 $25,284 $25,872 Senior (62 & older) - Resident $/Auto-pay $41 $41 $43 $43 $45 $45 102 112 118 124 128 132 12 $55,104 $60,888 $63,984 $69,120 $71,280 Senior (62 & older) - Non-Resident $/Auto-pay $45 $45 $47 $47 $49 $49 25 28 29 30 31 32 12 $15,120 $16,356 $16,920 $18,228 $18,816 Senior Annual - Resident $/Year $444 $443 $465 $465 $488 $488 643 708 743 780 803 827 1 $313,644 $345,495 $362,700 $391,864 $403,576 Senior Annual - Non-Resident $/Year $493 $493 $518 $518 $544 $544 161 177 186 195 201 207 1 $87,261 $96,348 $101,010 $109,344 $112,608 Family - Resident $/Month $78 $78 $82 $82 $86 $86 207 228 239 251 259 267 12 $213,408 $235,176 $246,984 $267,288 $275,544 Family - Non-Resident $/Month $87 $87 $91 $91 $96 $96 52 57 60 63 65 67 12 $59,508 $65,520 $68,796 $74,880 $77,184 Family - Resident $/Auto-pay $78 $78 $82 $82 $86 $86 236 260 273 287 301 316 12 $243,360 $268,632 $282,408 $310,632 $326,112 Family - Non-Resident $/Auto-pay $87 $87 $91 $91 $96 $96 59 65 68 71 75 79 12 $67,860 $74,256 $77,532 $86,400 $91,008 Family Annual - Resident $/Year $861 $861 $904 $904 $949 $949 714 785 824 865 891 918 1 $675,885 $744,896 $781,960 $845,559 $871,182 Family Annual - Non-Resident $/Year $957 $957 $1,005 $1,005 $1,055 $1,055 178 196 206 216 222 229 1 $187,572 $207,030 $217,080 $234,210 $241,595 City of Monterey Employee - Individiual $/Month $48 $48 $50 $50 $53 $53 57 63 66 69 71 73 12 $36,031 $39,634 $41,436 $44,768 $46,030 City of Monterey Employee - Family $/Month $68 $68 $72 $72 $75 $75 118 130 137 144 148 152 12 $106,548 $117,899 $123,924 $133,734 $137,349 City of Seaside Employee - Individual $/Month $56 $56 $59 $59 $62 $62 7 8 8 8 8 8 12 $5,376 $5,645 $5,645 $5,927 $5,927 City of Seaside Employee - Family $/Month $85 $85 $89 $89 $94 $94 8 9 9 9 9 9 12 $9,180 $9,639 $9,639 $10,121 $10,121 Stanford Hopkins - Individual $/Annual $586 $586 $615 $615 $646 $646 9 10 11 12 12 12 1 $5,860 $6,768 $7,384 $7,753 $7,753 Stanford Hopkins - Family $/Annual $957 $957 $1,005 $1,005 $1,055 $1,055 10 11 12 13 13 13 1 $10,527 $12,058 $13,063 $13,716 $13,716 Wellfit $/Annual $225 $225 $236 $236 $248 $248 3 3 3 3 3 3 1 $675 $709 $709 $744 $744 MIIS $/8-Month $390 $390 $410 $410 $430 $430 25 28 29 30 31 32 1 $10,920 $11,876 $12,285 $13,329 $13,759 Business/Corporate $/Month 48 $48 $50 $50 $53 $53 114 114 120 126 130 134 12 $8,640 $68,947 $72,576 $82,555 $85,095 Child Watch Per Child $15 $16 $16 $17 $17 - - - - - - 12 $0 $0 $0 $0 $0 Drop In Pass $/Day 10 $10 $10 $10 $10 $10 2,400 2,400 2,520 2,646 2,725 2,807 1 $24,000 $25,200 $26,460 $27,254 $28,071 Enhancement Facility Fee 5% of All Fees $0 $0 $0 $0 $0
Non-Capacity Growth Rate 1.05 1.00 1.05 1.00 4,424 1.10 1.05 1.05 1.03 1.03 Capacity growth rate 1.10 1.10 1.10 1.10 1.00 1.00 1.00 1.00 $3,277,632 $3,674,222 $3,856,208 $4,178,684 $4,310,765
Year 2 Year 3 Year 4 Year 5 Sellable
Sessions
Membership Fees
Total Revenue
Year 1 Management
Assumption
Number of Memberships
Membership Revenue & Expenses
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 96, Packet Page 103 DRAFT 10
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Membership/Fitness Management Responsibility of Management Team $0 $0 $0 $0 $0 Custodial - Facility Attendants $253,000 $265,650 $278,933 $292,879 $307,523 Senior Facility Specialist(s) Front Desk $70,782 $74,321 $78,037 $81,939 $86,035 Front Desk Attendant(s) $169,229 $177,690 $186,575 $195,904 $205,699 Guest Services Specialist $67,370 $70,739 $74,276 $77,989 $81,889 Supervisor on Duty $37,981 $39,880 $41,874 $43,968 $46,166 Fitness Supplies (Gym Wipes) $20,000 $21,000 $22,050 $23,153 $24,310 Group Ex. Class Instructors $35 Instructor Fee per Class, 60 per Week in Year 1 $105,000 $115,500 $127,050 $139,755 $153,731 Child Watch Instructors $17/Hour, Ave 2 Staff/Hour, 30 Hours/Week, 52 Weeks $0 $0 $0 $0 $0 Child Watch Supplies $0 $0 $0 $0 $0
Membership Discounts & Promotions Avg 10% of Rev (Example: Annual Pay - 10 Months & get 2 free incentives, etc.) $327,763 $367,422 $385,621 $417,868 $431,077 Membership Cards $1 per New Member $2,400 $2,520 $2,646 $2,725 $2,807 $1,053,525 $1,134,722 $1,197,061 $1,276,180 $1,339,237
$2,224,107 $2,539,500 $2,659,147 $2,902,504 $2,971,528
Pricing Notes Memberships Personal/Private Training
*1 In Shape Fitness Center - Core Single Club Member *2 HexBox Fitness Training Package *3 Mann Training Elite Individual Training $33 / month (+$50 enrollment fee) $299 / 20 sessions $35 / 1 hour Golds Gym Monterey - Month to Month CVAC Private Member Training 1 Session Mann Training Elite Individual Training $47/month ($69 processing fee + $45 annual fee) $85 / 1 session $225 / 8 sessions Golds Gym Monterey - Annual CVAC Private Member Training 6 Sessions Tech Pro Athletics $561 / year $490 / 6 sessions $50 / 1 hour
Golds Gym Monterey - 24 month CVAC Private Non Member Training 1 Session Tech Pro Athletics $36.99 / month ($69 processing fee + $45 annual fee) $95 / 1 session $450 / 10 sessions Anytime Fitness - Annual Membership CVAC Private Non Member Training 6 Sessions $45 / month $540 / 6 sessions
Anytime Fitness -24 month Membership Montage Wellness Center - Private Trial Training $43 / month $299 / 5 sessions
Chamisal Tennis and Fitness Club - Fitness Membership Montage Wellness Center - Basic Private Training $135 / month $549 / 10 sessions
HexBox Fitness - Unlimited Membership
$154 / month ($79 one time fee)
Monterey Sports Center
Monthly Annual - Resident Annual - Non Resident
$30.60/youth $333.90/youth $371/Youth
$33.30/Teen $367.20/Teen $408/Teen
$54.90/Adult $601.20/Adult $668/Adult
$40.50/Senior $443.70/Senior $493/Senion
$78.30/Family $861.30/Family $957/Family
$586.00/Corporate
Net Revenue
Total Cost of Goods Sold
Management Assumption
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 97, Packet Page 104 DRAFT 11
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Aquatics Instruction Revenue
Group Swim Lessons 8 Classes/Session $70 $70 $70 $74 $74 $77 170 170 174 179 183 188 12 $142,800 $146,370 $157,531 $161,469 $173,781 Private Swim Lessons 1/2 hr sessions $32 $32 $32 $34 $34 $35 300 308 315 323 331 339 12 $118,080 $121,032 $130,261 $133,517 $143,698 Semi-Private Swim Lessons 1/2 hr sessions $37 $37 $37 $39 $39 $41 200 205 210 215 221 226 12 $91,020 $93,296 $100,409 $102,920 $110,767 Endurance/Master Swim - Member 8 Classes/Session $50 $50 $50 $53 $53 $55 - 15 15 16 16 17 12 $9,000 $9,225 $9,928 $10,177 $10,953 Lifeguard Certification $/Session $225 $225 $225 $236 $236 $248 - 10 10 11 11 11 4 $9,000 $9,225 $9,928 $10,177 $10,953 CPR Certification - New $/Class $115 $115 $115 $121 $121 $127 - 5 5 5 5 5 4 $4,500 $4,500 $4,725 $4,725 $4,961 Lane Reservations $/Hour $18 $18 $18 $19 $19 $20 350 350 359 368 377 386 1 $6,300 $6,458 $6,950 $7,124 $7,667 Rentals
WBIT Parties $/Hour $375 $375 $375 $394 $394 $413 4 4 5 5 6 6 12 $18,000 $22,500 $24,806 $26,047 $28,716

1.05 1.05
$398,700 $412,605 $444,539 $456,154 $491,496
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Senior Aquatics Specialist 30 HRs $60,000 $60,900 $61,814 $62,741 $63,682 Lifeguards, Swim Instructors, & PT Staff Provided by Client (removed party staff) $335,000 $340,025 $345,125 $350,302 $355,557 Pool Party Staff 2 HRs Party plus set-up, clean-up, $17.5/HR per Employee $5,184 $5,184 $6,480 $6,804 $7,144 Program, Safety, & Operating Supplies CH recommendation $6,750 $6,953 $7,161 $7,376 $7,597 LG Class Materials $60/Participant (Course Record fee and Manuals) $600 $615 $630 $646 $662 $407,534 $413,677 $421,210 $427,869 $434,642
($8,834) ($1,071) $23,328 $28,285 $56,853
Pricing Notes Swim Lessons Water Fitness Life Guard Certification Guest Pass *1 Monterey Bay Swim Club *2 Pattullo Swim Center - Adult Resident Water Exercise *3 Pattullo Swim Center *4 Pattullo Swim Center - Youth Resident $40 / 0.5 hour $8.50 / 1 session $135 / 5 days (reisdent rate) $3.50 / 1 day Monterey Sports Center Pattullo Swim Center Adult Non Risdent Pattullo Swim Center Pattullo Swim Center - Youth Non Resident $37 / 0.5 hour $10.50 / 1 session $150 / 5 days (non resident) $4 / 1 day Chamisal Tennis and Fitness Club Pattullo Swim Center (Senion/College/Military) CVCYC Pattullo Swim Center - Adult Lap Resident $ 200 / 5 hours $6 / 1 session $200 / 5 days $5.75 / 1 day Carmel Valley Athletic Club Monterey Sports Center Pattullo Swim Center - Adult Lap Non- Resident $200 / 5 hours 208 $7 / day
Pattullo Swim Center CVCYC - Season Pool Pass
$225 / 5 hours $200 / 3 months
Monterey Sports Center CVCYC - Family Season Pass
$70/group lessons $400 / 3 months
$37/private lessons
CVCYC
$120 / 20 visit punch card
Rentals
*5 Monterey High School Pool Pattullo Swim Center (resdeint - up to 100 swimmers) CVCYC - Daily entry non-member $125 / 1 hour $227 / 2 hours $8 / 1 day
Pacific Grove HS Outdoor Pool Pattullo Swim Center (reisdent - up to 125 swimmers) CVCYC - Daily entry member $75 / 1 hour $265 / 2 hours $6 / 1 day
Carmel HS Outdoor Pool Monterey Sports Center
$140 / 2 hours $304/2 hours
Pattullo Swim Center (resdeint - up to 50 swimmers)
$209 / 2 hours
*6 Birthday Parties
TAG Adventure Park
$100 / 1 hour
Monterey Lanes Pizza Bowl Party
$340 / hours / 20 people
The Little Gym Awesome Birthday Bash
$319 / 1.5 hours / 15 people
The Little Gym Royal Prince/Princess
$349 / 2 hours / 15 children
Monterey Sports Center
$300/2 hours
$350/2 hours with WIBIT obstacle course
Aquatics Programs Revenue & Expenses
Revenue
Program Fees Number of Registrations Sellable
Sessions Year 1 Year 2 Year 3 Year 4 Year 5
Total Revenue
Total Cost of Goods Sold
Net Revenue
Management Assumption
Management Assumption
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 98, Packet Page 105 DRAFT 12
Year 1 Year 2 Year 3 Year 4 Year 5 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Sports Day Camp $/Week $189 $189 $198 $198 $208 70 74 77 81 85 89 15 $208,373 $218,791 $241,217 $253,278 $279,239 Kindergarten Sports Camp - Half-Day $/Week $95 $95 $100 $100 $105 - 12 13 13 14 15 10 $11,400 $11,970 $13,197 $13,857 $15,277 Martial Arts $/Session $55 $55 $58 $58 $61 25 26 28 29 30 32 12 $17,325 $18,191 $20,056 $21,059 $23,217 Camp Day-Care $/Day $25 $25 $26 $26 $28 295 310 325 341 359 377 1 $7,744 $8,131 $8,964 $9,413 $10,377 Non-Capacity Growth Rate 1.00 1.05 1.00 1.05 1.05 1.05 1.05 1.05 1.05 Capacity growth rate 1.10 1.10 1.10 1.10 1.00 1.00 1.00 1.00 $244,841 $257,083 $283,434 $297,606 $328,111
Cost of Goods Sold Year 1 Year 2 Year 3 Year 4 Year 5
Youth Programming Management Responsibility of Management Team $0 $0 $0 $0 $0 Camp Instructors 35% Gross Revenue $85,694 $89,979 $99,202 $104,162 $114,839 Equipment & Consumables 3% Gross Revenue $7,345 $7,712 $8,503 $8,928 $9,843 T-Shirts $8/Shirt $8,232 $8,644 $9,076 $9,530 $10,006
$101,272 $106,335 $116,781 $122,620 $134,688
$143,570 $150,748 $166,654 $174,986 $193,423
Pricing Notes Youth Programming Camps Oldemeyer Summer Full Day Camp *1 Central Coast YMCA $97 / 5 days
$/Y
Playland Summer Full Day Camp
Camp Sea Lab Marine Mania Sea Camp $120 / 5 days
$485 / 5 days
Soper Center Summer Cheer Camp
Monterey Summer Sports Camp $97 / 5 days
Year 5
Total Revenue
Total Cost of Goods Sold
Net Revenue
Youth Programming Revenue & Expenses
Revenue Program Fees Number of Registrations Sellable
Sessions Year 1 Year 2 Year 3 Year 4 Management Assumption Management Assumption
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 99, Packet Page 106 DRAFT 13
Revenue Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Concessions Sales - Contract Vending Nutrition Specific Vending - Contract service $9,515 $9,989 $10,473 $10,816 $11,175 $9,515 $9,989 $10,473 $10,816 $11,175
Cost of Goods Sold Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 $0 $0 $0 $0 $0
$9,515 $9,989 $10,473 $10,816 $11,175
Total Revenue
Total Cost of Goods Sold
Net Revenue
Food & Beverage Revenue & Expenses
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 100, Packet Page 107 DRAFT 14
Revenue Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Retail Sales $7,700 $9,240 $10,164 $10,977 $11,855
$7,700 $9,240 $10,164 $10,977 $11,855
Cost of Goods Sold Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Retail Product Cost 55% Retail Sales $4,235 $5,082 $5,590 $6,037 $6,520 $4,235 $5,082 $5,590 $6,037 $6,520
$3,465 $4,158 $4,574 $4,940 $5,335
Total Revenue
Total Cost of Goods Sold
Net Revenue
Retail Revenue & Expenses
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 101, Packet Page 108 DRAFT 15
Leased Space Revenue Areas/Office $ per SF/HR Year 1 Year 2 Year 3 Year 4 Year 5 Tenant Lease Agreements
Leased Space - Medical/Therapy 4 $35.00 $151,200 $157,248 $163,538 $170,079 $176,883 $151,200 $157,248 $163,538 $170,079 $176,883
- - - - -
$151,200 $157,248 $163,538 $170,079 $176,883
Tenant Revenue
Total Revenue
Total Cost of Goods Sold
Net Revenue
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 102, Packet Page 109 DRAFT 16
Revenue Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Advertisement/Sponsorship Income Digital & Static $50,000 $55,000 $60,500 $66,550 $73,205 $50,000 $55,000 $60,500 $66,550 $73,205
Cost of Goods Sold Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Sponsorship COGS 25% Sponsorship Revenue $12,500 $13,750 $15,125 $16,638 $18,301 $12,500 $13,750 $15,125 $16,638 $18,301
$37,500 $41,250 $45,375 $49,913 $54,904
Secondary Revenue Areas
Net Revenue
Total Cost of Goods Sold
Total Revenue
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 103, Packet Page 110 DRAFT 17
Overhead Expenses
18 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 104, Packet Page 111 Indoor Facility/Buildings
Indoor Facility Expense Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Alarm System Maintenance $5,000 $5,075 $5,151 $5,228 $5,307 Janitorial Supplies (Paper goods and cleaning products) Supplies based on SF $40,644 $41,253 $41,872 $42,500 $43,138 Contractural Services - Fitness Equipment Fitness Equipment PM $26,000 $26,390 $26,786 $27,188 $27,595 Contractural Services - Other SE Rentals $14,000 $14,210 $14,423 $14,639 $14,859 Contractural Services - Building Maintenance Based on Client Information $115,000 $116,725 $118,476 $120,253 $122,057 Safety Supplies provided by Client (includes AED oversight) $3,000 $3,000 $3,000 $3,000 $3,000 Vehicle Maint (OCM -BM) Based on Client Information $1,000 $1,015 $1,030 $1,046 $1,061 Maintenance - Bldgs. Included in Contractural Maintenance $65,000 $65,975 $66,965 $67,969 $68,989 Chemicals - Aquatics $66,000 $66,990 $67,995 $69,015 $70,050 Utility Expense (includes Aquatics) Electricity, Gas, Water, Trash, etc. $420,000 $426,300 $432,695 $439,185 $445,773 Total Facility Expense $755,644 $766,933 $778,392 $790,023 $801,829 Facility Expenses
19 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 105, Packet Page 112 Expense Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Department/City Indirect Service Charges - ISD Based on Hist. Financials $243,472 $247,124 $250,831 $254,593 $258,412 Department/City Indirect Service Charges - Risk Based on Hist. Financials $254,420 $258,236 $262,110 $266,041 $270,032 Department/City Indirect Service Charges Building Maintenance Risk $2,500 $2,538 $2,576 $2,614 $2,653 Printing & Postage Based on Client Information $30,000 $30,450 $30,907 $31,370 $31,841 Bank Service Charges Based on Client information $30,000 $30,450 $30,907 $31,370 $31,841 Communications Based on Client information (Comcast) $3,300 $3,350 $3,400 $3,451 $3,502 Dues/Subscriptions/Publications Based on Client information $14,700 $14,921 $15,144 $15,371 $15,602 Employee Uniforms Based on Client information (Includes MSC & Bldg. Maint) $6,200 $6,293 $6,387 $6,483 $6,580 Building Maint Uniforms Based on Client Information $1,200 $1,218 $1,236 $1,255 $1,274 Marketing and Advertising New Marketing - dedicated $31,009 $32,869 $34,841 $36,932 $36,932 Medical Oversight Based on Client Information $300 $318 $337 $357 $357 Licenses, Permits Music, Food, Pool, Lifeguard Certs, Water Slide Inspect $5,400 $5,481 $5,563 $5,647 $5,731 Office Supplies Includes Supplies, Office Equip Maintenance $5,700 $5,786 $5,873 $5,961 $6,050 Building Maint Operating Supplies Based. On Client Information $77,000 $78,155 $79,327 $80,517 $81,725 Software Based on Client information - Canva, Hootsuite $2,040 $2,071 $2,102 $2,133 $2,165 Travel and Education Maintenance Allotment $700 $711 $721 $732 $743 Travel and Education Based on Client information includes MSC + Maint. $6,000 $6,090 $6,181 $6,274 $6,368 Total Operating Expenses $713,941 $726,059 $738,443 $751,103 $761,810 Operating Expenses
20 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 106, Packet Page 113 Management Position Management Assumption Year 1 Year 2 Year 3 Year 4 Year 5 Sports Center Manager Existing - Based on Job Classification $151,050 $157,092 $163,376 $169,911 $176,707 Administrative Assistant Existing - Based on Job Classification $63,128 $65,653 $68,279 $71,010 $73,851 Aquatics Coordinator Existing - Based on Job Classification $90,293 $93,905 $97,661 $101,567 $105,630 Fitness Supervisor/Wellness Supervisor Existing previously titled Fitness Supervisor $100,506 $104,526 $108,707 $113,055 $117,577 Sports Coordinator Existing - Based on Job Classification $90,293 $93,905 $97,661 $101,567 $105,630 Fitness Coordinator/Membership Coordinator Existing previously titled Facility Coordinator $78,000 $81,120 $84,365 $87,739 $91,249 Admin Support - Front Desk Included in Membership $0 $0 $0 $0 $0 Building Maintenance Existing - Public Works $167,213 $173,902 $180,858 $188,092 $195,616 P&R Director (% of Salary) Existing - Based on Historical Financials $63,000 $65,520 $68,141 $70,866 $73,701 $803,482 $835,621 $869,046 $903,808 $939,961
Management Payroll Summary
Total Management Payroll
21 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 107, Packet Page 114 Total Payroll Summary
Total Payroll Summary Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Mgmt Sports Center Manager $151,050 $157,092 $163,376 $169,911 $176,707 Mgmt Administrative Assistant $63,128 $65,653 $68,279 $71,010 $73,851 Mgmt Aquatics Coordinator $90,293 $93,905 $97,661 $101,567 $105,630 Mgmt Fitness Supervisor/Wellness Supervisor $100,506 $104,526 $108,707 $113,055 $117,577 Mgmt Sports Coordinator $90,293 $93,905 $97,661 $101,567 $105,630 Mgmt Fitness Coordinator/Membership Coordinator $78,000 $81,120 $84,365 $87,739 $91,249 Mgmt Building Maintenance $167,213 $173,902 $180,858 $188,092 $195,616 Mgmt P&R Director (% of Salary) $63,000 $65,520 $68,141 $70,866 $73,701 Subtotal Management Payroll $803,482 $835,621 $869,046 $903,808 $939,961 Staff Custodial - Facility Attendants - Proposed Operating Hours & Special Events PT @ $23/HR - 11000 HRs/YR $253,000 $265,650 $278,933 $292,879 $307,523 Staff Senior Facility Specialist(s) Front Desk - Current Operating Hours $34.36/HRs - 40 HRs/wk $70,782 $74,321 $78,037 $81,939 $86,035 Staff Front Desk Attendant(s) - Current Operating Hours 212 HRs/wk @ $15.50/HR $169,229 $177,690 $186,575 $195,904 $205,699 Staff Guest Services Specialist - Current Operating Hours 56 HRs/wk @ $23.36/HR $67,370 $70,739 $74,276 $77,989 $81,889 Staff Supervisor on Duty - Current Operating Hours $25/Hrs - 29.5 HRs/wk $37,981 $39,880 $41,874 $43,968 $46,166 Staff Sports - Basketball Staff $3,086 $3,235 $3,732 $3,890 $4,257 Staff Sports - Volleyball Staff $557 $640 $775 $800 $901 Staff Sports Party Staff $630 $630 $630 $630 $630
Staff Aquatics Specialist $60,000 $60,900 $61,814 $62,741 $63,682 Staff Aquatics Staff/Lifeguards $335,000 $340,025 $345,125 $350,302 $355,557 Staff Aquatic Birthday Party Staff $5,184 $5,184 $6,480 $6,804 $7,144 Subtotal Sport Admin Staff $1,002,818 $1,038,894 $1,078,250 $1,117,845 $1,159,484 Instructors Sports - Basketball Instructors $2,438 $2,559 $2,956 $3,085 $3,380 Instructors Sports - Volleyball Instructors $1,380 $1,610 $1,980 $2,024 $2,345 Instructors Fitness & Training Instructors $66,420 $67,748 $74,693 $78,427 $82,349 Instructors Group Ex. Class Instructors and Child Watch $105,000 $115,500 $127,050 $139,755 $153,731 Instructors Camp Instructors $85,694 $89,979 $99,202 $104,162 $114,839 Subtotal Instructors (COGS) $260,932 $277,397 $305,881 $327,453 $356,642 Referees Sports - Basketball Officials $9,072 $9,526 $10,002 $10,437 $10,890 Referees Sports - Volleyball Officials $3,360 $3,808 $4,126 $4,299 $4,480 Subtotal Referee/Trainers (COGS) $12,432 $13,334 $14,128 $14,736 $15,370 $2,079,664 $2,165,247 $2,267,305 $2,363,842 $2,471,457
UAAL Unfunded Actuarial Expires 2045 - FY22 Allotment carried forward $220,687 $220,687 $220,687 $220,687 $220,687 Bldg Maint. - UAAL Unfunded Actuarial Expires 2045 - FY22 Allotment carried forward $43,296 $43,296 $43,296 $43,296 $43,296 Payroll Taxes/Benefits - GEM (78.44%) Sports Center $331,189 $344,436 $358,214 $372,542 $387,444 Payroll Taxes/Benefits - GEM (78.44%) Building Maintenance $131,162 $136,408 $141,865 $147,539 $153,441 Payroll Taxes/Benefits - MEA (65.381%) $139,948 $145,546 $151,368 $157,423 $163,719 Payroll Taxes/PT - (5.24%) $66,872 $69,672 $73,269 $76,506 $80,250 $933,154 $960,046 $988,698 $1,017,993 $1,048,838
$3,012,818 $3,125,293 $3,256,003 $3,381,835 $3,520,294
Payroll Subtotal
Payroll Taxes/Benefits/Bonus Totals
Total Payroll Cost
22 DRAFT
Council Special Meeting, 5/24/2023, Item No. 2., Item Page 108, Packet Page 115