Administrative
Report
N.1., File # 21-3463 Meeting Date: 1/4/2022
To: MAYOR AND CITY COUNCIL
From: CAMERON HARDING, COMMUNITY SERVICES DIRECTOR
TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING THE COMMUNITY SERVICES DEPARTMENT’S USER-PAY CONTRACTED CLASSES PROGRAM
EXECUTIVE SUMMARY
During the Fiscal Year 2021/2022 Budget review, the City Council directed staff to return with an item to discuss the City’s user-pay program. These user-pay activities, also known as “Contracted Classes”, provide the community with recreational and instructional programs, camps and classes for all age groups, taught by certified instructors. Approximately 150 to 200 classes and camps are typically offered by the City each quarter, including sport activities such as tennis, soccer, surfing, golfing, T-ball and skateboarding and skill development activities like; dance, gymnastics, martial arts, culinary arts, art, and music.
These activities are provided by qualified contractors (“Instructors”), trained to teach in specific areas of expertise, and take place throughout the City in indoor and outdoor locations selected by staff and the Instructor based on community need. Activities that take place in a park, are required to obtain a permit, available through the Contracted Class program, prior to instruction per Redondo Beach Municipal Code (RBMC) 4-35.22(b). Potential instructors are interviewed and go through a series of steps in order to be accepted into the program, including a background check through Live Scan; submission of insurance certificates; and the execution of an agreement outlining the individual services offered to the community.
Standard practice for the revenue share of Contracted Classes includes a “70/30” split, with the instructor receiving 70% of class fee revenue and the City receiving 30%. This approach, with only minor deviations, is shared by most municipalities. Offering contract classes is of great community benefit and is a core function of recreation departments across the country. In general, these programs provide a level of oversight for the recreation services taking place throughout the City; ensure that the community can participate in a variety of cost-effective activities, in a safe environment; and allow the City to balance and regulate the use of public space for dedicated activities while ensuring opportunity is still available to the community for informal recreation purposes.
Staff recommends the City Council receive and file this report and direct the Department to move forward with selecting new instructor contracts for the upcoming class session and beyond.
N.1., File # 21-3463 Meeting Date: 1/4/2022
BACKGROUND
All activities offered through the City’s Contracted Classes program are included in the Community Services Department’s quarterly newsletter. Attachment 1 includes select pages from the current version of the newsletter that details Contracted Class offerings. Although the comprehensive list is smaller than the typical breadth of activity offerings due to COVID-19 restrictions, staff is confident that additional activities will be offered in upcoming seasons including new and expanded programs.
The electronic newsletter is included on the City website; monthly Ezine utilizing a dynamic email distribution list; Department social media pages; street banners; and posters displayed throughout the City. Coordination of the Contracted Class program is managed by the Community Services Department.
Instructor Approval Process
Prospective instructors are required to complete a series of steps that allow the City to review the qualifications of the instructor in the specific area they desire to teach. This process also allows time for staff to assess the community need or desire for the activity. Prospective instructors are required to complete the following for the City’s consideration of their contracted services:
1. Proposal: A completed proposal that outlines the instructor’s experience teaching the proposed activity is submitted and reviewed by staff.
2. Redondo Beach Business License: Instructors must obtain a Redondo Beach Business License and ensure that it remains valid while providing instruction through the Contracted Class program.
3. LiveScan: Instructors must successfully complete a LiveScan fingerprint test that will review their background information.
4. Certificate of Insurance (“COI”): Instructors must provide valid proof of a $1 million general liability insurance policy and guarantee that the policy remains valid while providing instruction through the Contracted Class program. Updated copies of the insurance policy are required to be submitted to the City annually.
5. Independent Contractor Agreement (“ICA”): Instructors must sign an ICA, which outlines certain requirements including the completion of a Live Scan background check for both the instructor and their employees that will perform services on behalf of the instructor in the city of Redondo Beach. ICA’s are typically valid for two-year terms. The agreement also provides guidance regarding the required methods for accurate record-keeping and allows the City to monitor the performance of the contractor. This agreement requires formal approval by the City Council prior to the first-class taking place. A sample copy of the ICA is included as Attachment 2.
Following the completion of the ICA, instructors work collectively with staff to coordinate and
N.1., File # 21-3463 Meeting Date: 1/4/2022
schedule their activities to be included in the upcoming quarterly newsletter.
Registration and Financial Information
The Community Services Department oversees the collection of all registration fees for Contracted Classes through the utilization of the Class and RecTrac software programs. Instructors are not authorized to collect any registration fees directly. The cost of each activity is coordinated and agreed upon between the City and the instructor prior to the start of registration. This fee considers the type of activity; any needed equipment to complete the activity; and industry standards for similar classes and activities. The fee total includes a complement of individual fees that support a variety of fees paid to the City and the instructor. These include the cost of the activity and a $5 processing fee. The activity cost is shared with the instructor who receives 70% of the amount; the City receives the remaining 30%. The processing fee is paid in full to the city to support the cost of the recreation software that manages activity registration.
Included in Table 1 below are the City’s collected portion of registration fees since Fiscal Year 2016/2017. These additional years are included to demonstrate the success of the Contracted Class program pre and post pandemic.
Table 1: Contracted Class Revenue
FY 2016 -2017 $399,117
FY 2017 -2018 $419,220
FY 2018 -2019 $441, 429
FY 2019 -2020 $327,250
FY 2020 -2021 $167,089
Contracted Class revenue can fluctuate due to activity offerings; seasonality of the activity; instructor and facility availability; activity fee structure; and overall enrollment numbers. Looking ahead, staff anticipates the Fiscal Year 2021-22 revenue to be approximately $420,000, since a number of activities have resumed following COVID closures. Additionally, there are many potential instructors that are pending an executed agreement to commence their activity, so future offerings may be expanded.
Revenue Share Standards
Recreation and Community Service Departments across the nation use similar contracted services to provide classes and activities to their communities. It is a great opportunity for residents to participate in a variety of activities while providing an opportunity for local professionals to earn additional income while sharing their expertise and talents with the community in a more costeffective manner than similar activities offered in a private setting. The level of revenue share is a standard component of the Contracted Class program and deviates slightly for each municipality.
Listed in Table 2 below is the revenue split implemented in nearby communities:
N.1., File # 21-3463 Meeting Date: 1/4/2022
Table 2: Contracted Class Revenue Split Standards
Hermosa Beach 70/30 split
Irvine 70/30 split
Manhattan Beach 65/35 split if held at city site
70/30 if held at private site
Rancho Palos Verdes 70/30 split
Tor rance 60/40 split if held at city site
65/35 if held at private site
The city of Redondo Beach adopted its 70/30 model over 20 years ago and has been successfully implementing it ever since.
Benefits of the Contracted Class Program
The offering of Contracted Classes is of great community benefit and is a core function of recreation departments across the country. Contracted Classes provide a level of oversight for the activities taking place in public areas and ensure that the community has a variety of safe recreation offerings.
The program also allows the City to balance and regulate the use of its limited public space. Many private businesses attempt to conduct business on City property without proper approval. These activities can obstruct public access to park and recreation facilities. The City’s contracted class program helps balance the number of prescheduled classes with the opportunity for the public to use City parks for drop-in activities. In the absence of a contracted class program, City parks and open space areas are often overcrowded by unpermitted activities.
Another benefit of the Contracted Class program is that it ensures a variety of cost-effective activities are provided to the community. Many private businesses have additional expenses added to their registration fees due to the significant overhead costs of private venues. Through the City’s program, Contracted Classes are provided at a reduced cost as the City owns and separately maintains the various park and recreation facilities. This allows participants to experience a variety of classes and activities that they may not be able to afford in private settings.
It should be noted that contract class activities held at the beach also require a permit through the Los Angeles County Department of Beaches and Harbors, as the County owns and operates the beaches in Redondo.
COORDINATION
This report was coordinated by staff in the Community Services Department.
FISCAL IMPACT
The Contracted Class program is estimated to generate approximately $420,000 of revenue for the City in FY 2021-2022.
APPROVED BY:
Mike Witzansky, City Manager
N.1., File # 21-3463 Meeting Date: 1/4/2022
ATTACHMENTS
1. Quarterly Newsletter - Contracted Classes pages
2. Sample Independent Contract Agreement