REPORT TO MAYOR AND COUNCIL NO: 07-214 Council Meeting ...

Issued by the City Manager

REPORT TO MAYOR AND COUNCIL

NO: 07-214

Template rev. 03/07

Council Meeting: June 19, 2007

SUBJECT: Agreement with California Sports Center for Operation of Fremont High School Swim Pool

REPORT IN BRIEF In July 2000, the City entered into a 25-year agreement with the Fremont Union High School District for the construction and operation of a 50-meter swim pool at Fremont High School. The pool opened to the public in July 2002, and public swim programs have been provided under a license agreement with California Sports Center since that time. The current license agreement expires August 31, 2007. To maintain uninterrupted operation of the public swim programs, staff initiated a process in fall 2006 to solicit proposals from qualified service providers to manage and operate public swim programs at the Fremont High School Pool.

At their March 27, 2007, meeting, after reviewing the proposals received, Council directed staff to negotiate a new agreement with the current contractor, California Sports Center (CSC), for continued operation of the Fremont High School Swim Pool. Council also gave staff a number of specific items to be included in the agreement that was to return to Council for final approval. This report provides Council the results of the negotiation and seeks Council’s approval of a new proposed agreement (Attachment A, Agreement between the City and California Sports Center).

Most of the specific items Council directed staff to include in the new agreement have been done so without a significant impact to the agreement’s financial or service level considerations. Guaranteeing Sunday open swim during the summer does have a significant impact on the financial return of the agreement. Therefore, two options are provided for Council consideration. Both options guarantee open swim for two hours each day during summer weekdays. Option #1, however, includes open swim on both Saturdays and Sundays for three hours each day during the summer, and would reduce CSC’s annual payments to the City by an average of $8,700 annually as compared to the City’s current financial plan, and by $6,000 annually as compared to Option #2. Option #2 would provide open swim on Saturdays during the summer for only two hours a day and would not guarantee open swim on Sundays.

Staff is recommending Alternative 1: City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A,

Agreement with California Sports Center for Operation of Fremont High School Swim Pool June 19, 2007

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for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and approves an increase in the General Fund subsidy to the Community Recreation Fund of a total of $69,598 over the eight years of the agreement. The Parks and Recreation Commission met on June 6, 2007, and voted 4-0 (Commissioner Kinder absent) to recommend Alternative 1: City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and approves an increase in the General Fund subsidy to the Community Recreation Fund of a total of $69,598 over the eight years of the agreement.

BACKGROUND Over the years, the Sunnyvale Department of Parks and Recreation has provided an extensive array of public swim programs. The City operates aquatics programs at the Washington Park, Lakewood School, Columbia Middle School, Peterson Middle School and Sunnyvale Middle School pools. The pool at Washington Park is the only pool owned outright by the City. Public swim programs are provided directly by the City at the four other pools through special use agreements between the City and the Sunnyvale Elementary School District and the Santa Clara Unified School District (Peterson).

History of the City / School Partnership for the Construction and Operation of a 50-meter Pool at Fremont High School In April 20, 1999, the Fremont Union High School District (FUHSD) contacted the City of Sunnyvale regarding the possibility of joint development of a 50-meter pool. FUHSD indicated that if the City did not choose to enter into joint development of a new pool that the District would plan to build a 30-meter pool.

Around this same time, a new community group, the Friends of Fremont Pool, formed for the purpose of providing community support for construction of the proposed 50-meter pool and raising funds to establish a $1,000,000 endowment fund to offset the City’s on-going operating costs should the pool be constructed. Friends of Fremont Pool began FY 2006/2007 having raised $833,001. The Friends of Fremont Pool brought in an additional $27,970 over the course of the year, and the principal is now $860,971. The Endowment Fund is expected to provide an estimated $43,050 towards annual operating costs in both FY 2007/2008 and FY 2008/2009.

City Council directed staff in June of 1999 to proceed with a feasibility study to consider the proposed City/School District partnership for the development and operation of a 50-meter pool at Fremont High School. The results of the


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study affirmed findings that a 50-meter pool would be most conducive to competitive and lap swimming, and would not be ideal for family swim or other general community uses. The study also highlighted staffs’ intent to seek a third party to operate the public use of any new pool as a means of limiting future costs to the City. Following the completion of the study, City Council endorsed the concept of a joint use agreement between the City and the Fremont Union High School District for the construction of a 50-meter pool May 2, 2000. The City entered into a joint use agreement with the Fremont Union High School District on July 18, 2000 to construct and operate the 50-meter pool.

The 25-year agreement with the District divides pool use into City, School and shared use times. During the shared use times, the City has a designated number of lanes for use. Based on the District’s needs for instructional and competitive use, the number of lanes allocated to the City varies during the day, between the days of the week and throughout the year. The design of the Fremont Pool is specific to the needs and use of high school aged students, and is designed for competitive uses. The shape, depth and temperature of the pool are dictated by high school competitive and instructional needs. This in turn dictates the types of community uses that will best be served by the pool.

As part of the project, the District also constructed and provided exclusive use to the City of a public swim building, which contains lockers and shower rooms, offices and a training classroom. The agreement holds the District responsible for all school-related swimming programs and for the maintenance of the swim pool (filtration, heating, vacuuming, etc.) and of the school locker rooms. The cost of the swim pool maintenance is split between the District and City (50% each). In accordance with the agreement the costs for maintenance and utilities for the public swim building are the responsibility of the City. This responsibility has been transferred to the contractor, under the terms of the agreement between the City and California Sports Center. Staff estimates annual costs to be approximately $39,000 were the City to be providing the maintenance itself.

Solicitation of Private Entity to Provide Public Swim Programs at Fremont High School Pool When the City entered into the agreement with the Fremont Union High School District, it was determined that the City did not have the staff or budget resources to operate the Fremont High School Pool for public use and a decision was made to locate an outside contractor or organization that would provide public swim programs on behalf of the City. In February 2001, the City issued a request for proposals to manage the public’s use of the pool. Two proposals were received; however, they did not adequately address the needs and proposed operations at the pool and they were rejected.


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On May 14, 2001, the City issued a second request for proposals to provide public swim programs at the Fremont High School Pool. City staff subsequently began negotiating with the most qualified contractor, California Sports Center (CSC).

A Joint Study Session with the City Council and the Parks and Recreation Commission was held on February 4, 2002, regarding pool fees and use schedules. A memo to Council from the Director of Parks and Recreation, dated February 7, 2002, documents the guidance given staff by Council during the February 4, 2002, joint study session with the Parks and Recreation Commission, relative to the 50-meter pool partnership with the Fremont Union High School District. Staff utilized this input in setting priorities and negotiating terms with the California Sports Center for operation of the Fremont Pool.

The specific policy guidance provided by City Council at that February 4, 2007 meeting included the following:

1. Continue to use established City policy governing the Community Recreation’s Enterprise Fund to develop recommended fee schedules for the pool. These policies revolve around market-based pricing, but also include the consideration of resident/non-resident fee differentials and other subsidies where appropriate.

2. Continue to establish pool schedules administratively, using the following priorities as general guides:

• A commitment to first expand and serve the needs of the adult swim community—particularly the establishment of a consistent, year-round lap swim schedule.

Beyond this, other uses of the pool should be governed by:

• The City’s Enterprise Fund philosophy and market demand/pricing.

• To the degree that it can be accomplished within the context of the guidelines given above for both fees and use schedules, Council did express an interest in, and encouraged staff to pursue (through negotiations with the contractor), a broad array of swim opportunities (specifically lap swim, masters, swim opportunities for children in grades K-12, swim lessons, and recreational/family swim opportunities) as opposed to a narrow scope of programs.

Current Agreement with the California Sports Center for the Provision of Public Swim Programs at the Fremont High School Pool On May 21, 2002, City Council approved a 63 month (5 ¼ year) license agreement with California Sports Center (CSC) to provide for public swim programs at the Fremont High School 50-Meter Pool. The agreement required


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the contractor to provide, to the degree possible within the context of market-based programming, a broad array of swim opportunities such as lap swim, masters programs, swim opportunities for children in grades K-12, swim lessons for all ages, and recreational/family swim opportunities, diving, water exercise classes, and safety and training classes.

The agreement required no payment to the City for the first 6 months (July through December of 2002) to allow the contractor to make an investment in equipment, supplies and staff training and to develop swim programs and create a customer base before making substantial payments for facility use. Payments increased over the following years to reflect growth in the swim programs and increasing revenues. The Licensee was required to assume responsibility for payment of water, gas and electric for the swim building (not the pool), garbage for any City and/or contractor programs, and maintenance of the interior of the public swim building.

Under the supervision of California Sports Center, Fremont High School 50-Meter Pool opened to the public for the first time on July 2, 2002. Since this time, performance by the California Sports Center has been consistent with the operational agreement. Customer satisfaction surveys conducted by the contractor reflect the general public’s satisfaction with their programs and services. Additionally, CSC staff has been responsive to all requests for information made by staff and questions that have been raised by members of the public.

During the period of this license agreement, City staff has from time to time received complaints from the public primarily related to the temperature of the public swim building. Unfortunately, when the building was constructed the thermostat for the building was connected to the school’s control unit and the City and the licensee are unable to control the temperature in the locker rooms of the public swim building. In addition, the building does not have air conditioning and can get quite warm during the summer. Staff has had a series of discussions with the school district staff in an attempt to resolve this situation; however, as yet there has been no resolution.

A former employee of the Licensee has made repeated allegations of unsafe conditions at the pool. City staff has investigated these allegations and discussed the issues raised with the contractor. While there is always room for improvement in any operation, staff found the contractor’s safety regulations and policies to be consistent with or exceeding those used in City aquatics programs and no significant issues were identified. A recent customer satisfaction survey showed that over 95% of the surveyed customers indicated they were “Very Satisfied” with programs, services and the level of safety provided by California Sports Center.


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Financial Performance for the Operation of the Fremont High School Pool Operations for Public Use The following chart provides fiscal details for City revenues and expenditures related to the operation of the Fremont Pool under the current agreement with California Sports Center.

FHS Swim Pool Operational Year

Revenue from Contract Operator

Revenue from Endowment

Fund

City’s Operational

Costs

Net (Loss)/ Gain to

City

FY 02/03 $11,636 $93,316 ($120,161) ($15,209)*

FY 03/04 $36,951 $32,335 ($117,849) ($48,563)

FY 04/05 $47,121 $25,748 ($82,385)** ($9,516)

FY 05/06 $51,000*** $32,402 ($121,659)*** ($38,257)

Budget for FY 06/07

$51,000 $41,600 ($129,928) ($37,328)

*This represents the first year of the contract. Per the Agreement with the Contract Operator, no payment was required for the first six months to allow for start up costs associated with the new program. In addition, Endowment Fund revenue for this year is higher than in subsequent years because it represents the pooling of interest accrued since the start of the Endowment Fund in 1999.

**Based on invoices received from FUHSD it appears utility and maintenance costs for the year were much lower than other years. However, staff believes this may have been a one-time anomaly.

***One $12,000 payment from CSC was recorded as a credit against expenses, artificially lowering City’s recorded operational costs while understating revenues from the contractor. Here the table is adjusted to show the corrected revenues and operational costs.

Request for Proposals for Continued Operation of the Fremont High School Pool The current license agreement expires August 31, 2007. To maintain uninterrupted operation of the public swim programs, staff initiated a process in fall 2006 to solicit proposals from qualified service providers to manage and operate public swim programs at the Fremont High School Pool. On October 30, 2006, Request for Proposals #F0610-34, for Operation of Public Swimming Programs at Fremont High School Pool was distributed. The RFP sought proposals from qualified individuals or organizations interested in entering into a long-term agreement to provide public swim programs at the Fremont High School Pool, commencing on September 1, 2007. The RFP was developed based


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on previous Council policy direction for establishing pool schedules, consistent with the guidance provided by City Council at the February 4, 2002, Study Session which was also stipulated in the current license agreement with California Sports Center.

Three (3) proposals, including one from the existing contractor CSC, were submitted to the City for evaluation by staff. A fourth option was prepared by staff which considered City Recreation Division operation of the Fremont High School Pool. On March 27, 2007, City Council held a public hearing to consider these four alternatives, and directed staff to negotiate an agreement with California Sports Center for the continued operation of the Fremont High School Swim Pool.

EXISTING POLICY Open Space and Recreation Sub-Element

Policy 2.2 B.4. Use entrepreneurial strategies to identify and reach new markets for programs, services and revenue generation, and to strengthen relationships within existing markets.

Policy 2.2 B.6. Leverage available resources by pursuing co-funded and/or cooperative agreements for provision and maintenance of programs, facilities, and services, in order to maximize benefits to the community. Partners may include, but are not limited to, school districts, non-profit groups, governmental agencies and businesses.

Policy 2.2 D.1. Give priority to services, facilities and amenities that are not readily available through other providers within or near Sunnyvale.

Policy 2.2 D.3. Give priority to services, facilities and amenities that fulfill a basic need or teach basic skills (e.g., non-competitive, developmental sports instruction such as learn to swim given priority over competitive sports programming).

Policy 2.2 D.4. Give priority to services, facilities and amenities in which the community demonstrates interest.

Policy 2.2 D.5. Give priority to services, facilities and amenities that benefit a greater number of residents.

Policy 2.2 D.7. Give priority to services, facilities and amenities that can be used by multiple users or serve multiple purposes.

Policy 2.2 E.3. Provide recreation and enrichment programs, services, facilities and amenities to underserved areas and/or populations of the City. Underserved areas and/or populations could be due to geography, gender, economics or ethnicity, etc.


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The following sections of the City’s Fiscal Management Sub Element also address issues of operating and contracting for the operation of the public’s use of the Fremont High School Swim Pool:

Fiscal Management Sub-Element - Community Recreation Fund Policies

The General Fund subsidy received by the Community Recreation Fund shall be fixed at the FY 2006/2007 level as the base year and increased annually by the inflation factor included in the recommended budget for the upcoming year.

Any increase in service levels by City Council not covered by an increase in revenues will result in a corresponding increase to the General Fund subsidy.

Any action by City Council to decrease revenues of the Community Recreation Fund not covered by a decrease in operating costs will result in a corresponding increase to the General Fund subsidy.

Council Policy 7.3.6: Managing for Competitiveness

Guidelines, 1: The premise of this policy is that competitive service delivery produces value for City residents and that either in-house or alternative service delivery methods may produce superior service value.

Guidelines, 5: In situations involving currently contracted-out and new services, a similar process will be used to determine if the City can deliver the service competitively. . .The external service provider will be retained unless City staff can demonstrate the cost and quality effectiveness are equivalent to or greater than the external service provider or where the potential savings from outside service delivery is greater than the projected cost of basic transition and ongoing service delivery costs for the same level of service.

Guidelines, 10: Ensure Managing for Competitiveness Efforts Result in the Desired Service Outcomes. Whether a service is retained in-house or delivered by an external service provider, the City should seek to ensure that desirable quality and cost outcomes are met. In order of priority, desired managed competition outcomes are:

• Better service at lower cost.

• Better service at equal cost.

• Equal service at lower cost

If at least one of the desired service outcomes cannot be clearly identified at the conclusion of a managed competition process, the current service provider (City staff or external provider) will retain the service.


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Service Selection Criteria (excerpts).

• Nature of service: the extent to which a service is self-contained or a component of a larger service delivery system.

• Cost Savings Potential: The degree to which managing competitively is likely to reduce or avoid future costs without compromising the quality of the service.

DISCUSSION At their March 27, 2007, meeting, Council directed staff to negotiate a proposed agreement as specified by Council with the current contractor, California Sports Center (CSC), for operation of the Fremont High School Swimming Pool: with the following additions to the contract:

• Guaranteed minimum hours for lap swim as currently contained in the contract;

• Guaranteed minimum hours for lessons; • Guaranteed minimum hours for master swim; • Guaranteed minimum hours for local swim team (for a percent to be

determined by staff but must be greater than 50 percent Sunnyvale residents);

• Guaranteed minimum hours for open swim and those hours to include afternoons on Saturdays and Sundays for summer months;

• If any of the negotiation points have a large financial difference, staff can come back with two alternatives;

• Contract terms to be 5 – 8 years (as negotiated by staff); • Sunnyvale-based groups to be given priority over all other groups; • Maintenance and housekeeping must receive a very good rating from

participants and repairs are to be completed within six months; • All fees are to be set so that in staff’s opinion the City will not lose

members to other cities because the fees are too high; • Maintain present punch card/monthly card rate structure and not

establish a membership structure; • Extension of up to six months (at discretion of the City Manager) of the

existing agreement to allow adequate time for negotiations; • Explore the feasibility of a percentage increase in rates for non-residents

to be off-set by lower fees for residents; • Review proposals that the previous Parks and Recreation Commission

developed to subsidize the swim programs; and • Contract to come back to Council for approval.

Staff met and communicated with CSC on a number of occasions, ultimately developing a new proposed agreement (Attachment A).

Agreement with California Sports Center for Operation of Fremont High School Swim Pool June 19, 2007 of 20

Lane Hours Before addressing each of Council’s specific requirements, a general discussion of lane hours is warranted, since several of the requirements call for guaranteeing a minimum number of lane hours for specified uses. A “lane hour” means any one-hour block of time in each 25-yard swimming lane assigned. To date, however, CSC has not tracked lane hour usage as it is ever changing. Literally each day is different. CSC has tracked actual participation, with some exceptions for groups using the pool (where CSC does not maintain the rosters or require sign-in) and for special events, such as swim meets. Therefore, there is limited data to frame current use levels in lane hours and upon which to base these new required minimums. Based on the City’s agreement with FUHSD for use of the pool, the pool is generally available for public use from 5 a.m. to 10 p.m., although there is not always programming occurring for that entire time, dependent on day of the week and time of year, and only a portion of the pool may be available at any given time dependent on the master schedule detailing when and what lanes are reserved for school use and what lanes are available to the City for programming. The District has the right, according to the City’s agreement with them, to preempt City programming for up to 15 days a year not covered in the master schedule. There are a maximum possible 23 25-meter lanes, which can be configured in a variety of ways. In establishing minimum lane hours, the City is requiring a certain share of pool time be set aside for each type of programming. Actual usage may vary from the minimum set. On the one hand, actual usage may well be higher, if demand warrants it and if CSC is able to accommodate the higher usage. On the other hand, usage could potentially dip below the minimum if demand is not present, although this is unlikely. For example, CSC must offer a minimum number of lane hours of swim lessons. However, some of those offerings could be cancelled if there are no sign-ups. Other factors impacting actual lane hours used include pool closures for priority school use, weather, repairs, (etc.).

Also, the sum of the minimums for the required programs in this agreement do not total up to the annual operating lane hours. This is to allow the contractor the flexibility to manage a broad array of programs to meet customer demands, to develop new programs and markets, and in acknowledgement that not all of the hours that the pool is available will be attractive to users.

Key Requirements in Agreement and Changes from Current Agreement This report is organized according to the contract requirements specified in the action taken by Council at their March 27, 2007, meeting. Each requirement is listed as a heading, followed by a summary of how the proposed agreement addresses Council’s requirement. Following this point-by-point discussion of


the requirements is a section regarding facility improvement projects contained in the new agreement. Guaranteed minimum hours for lap swim as currently contained in the contract A set number of hours (9,152 lane hours) per year was established when the FHS pool opened to the public in 2002. This minimum number is continued into the new proposed agreement. This is equivalent to:

Monday – Friday

6:00a.m. – 8:00 a.m. Minimum of 4 lanes

11:30 a.m. – 1:30 p.m. Minimum of 4 lanes

6:00 p.m. – 8:00 p.m. Minimum of 6 lanes

Saturday and Sunday

8:00 a.m. – 11:00 a.m. Minimum of 6 lanes

Guaranteed minimum hours for lessons A set number of 7,000 lane hours is incorporated into the new proposed agreement for lessons. This allows for swim lessons to be offered all year round, with a heavy concentration of lessons in the summer months.

Guaranteed minimum hours for masters swim A set number of 2,500 lane hours is incorporated into the new proposed agreement for adult master swimmers. This is for regularly scheduled coached practices year round during the week. These hours are in addition to the lane hours/schedule dedicated to lap swimming.

Guaranteed minimum hours for local swim team (for a percent to be determined by staff but must be greater than 50 percent Sunnyvale residents) A set number of 8,000 lane hours is incorporated into the new proposed agreement for use of the FHS pool by local youth swim team(s), comprised of at least 60% Sunnyvale residents. This would allow for year round access to the pool for local youth swim team(s).

Council should be aware that this requirement does not guarantee use of FHS pool by the Sunnyvale Swim Club (SUNN) at past and current year levels. The reason for this is that over time (note the new proposed agreement is for 8 years) there is a good potential that any number of situations could occur that would have a significant impact on youth competitive swimming in Sunnyvale. For example, existing or new swim clubs meeting the same criteria as SUNN could compete with SUNN for lane time. (This could happen even if the requirement were not in place.) It is also possible that a new or splinter club from SUNN could be formed and have a higher percent of residents than does SUNN and claim priority over SUNN. Another possibility is that SUNN could


decrease in size and no longer need or be willing to pay for use of the lane hours.

Guaranteed minimum hours for open swim and those hours to include afternoons on Saturdays and Sundays for summer months Two options are made for Council consideration regarding open swim. Both options would guarantee an open swim schedule for a minimum of six weeks (could be up to eight weeks, depending on District scheduled end/start of the school year) each summer Monday through Saturday 1-3 p.m. However, Option 1 would extend open swim on Saturdays for an additional hour (for a total of 3 hours) and would guarantee open swim on Sunday afternoons from 1 – 4 p.m. for a minimum of 6 weeks each summer. This would be equivalent to between 1,750 and 2,400 lane hours annually. This is roughly equivalent to the open swim programmed at the City’s other pools, and provides three hours a day on Sunday compared to this summer’s five hours a day on Sunday (as per Council action on May 15, 2007). Under this option, the addition of the Sunday open swim and the extra hour of open swim on Saturdays reduce the annual rental payment made to the City by the contractor by $6,000. (Please see Fiscal Impact Section for more detail on these options.)

Option 2 would continue an open swim schedule consistent with the existing contract, but would not include a guaranteed Sunday afternoon schedule and would reduce the open swim time on Saturdays by one hour as compared with Option 1. Open swim is available on Sundays at the other pools programmed by the City. If Council directs that the Sunday open swim not be included, the annual revenue paid to the City would increase by $6,000 over Option 1. This schedule would be equivalent to between 936 and 1,248 lane hours annually.

Contract terms to be 5 – 8 years (as negotiated by staff) An eight (8) year agreement is proposed to enable CSC to better establish programs and service levels, to reduce the amount of work required of Council and staff in seeking, reviewing, negotiating and implementing a new agreement and because CSC has a proven record of successful public swim programming and responsiveness to the swimming community.

Sunnyvale-based groups to be given priority over all other groups For the purposes of this agreement, "Sunnyvale-based business/group" means any business located in Sunnyvale with a business license from the City of Sunnyvale or any group whose membership consists of a minimum of 60% Sunnyvale residents and whose primary purpose is to serve Sunnyvale residents.

It should be noted, that while this directive can be easily implemented with no discernible impact on the new proposed agreement with CSC, there could be times when there will be more than one Sunnyvale-based group competing for


the same time. In those instances, priority will be given based on the percent of Sunnyvale residents in their organization.

Maintenance and housekeeping must receive a very good rating from participants and repairs are to be completed within six months This requirement is partially directed to CSC and partially directed to the City’s Parks and Recreation Department. Similar to the existing agreement, the proposed agreement requires the contractor to provide basic cleaning and janitorial services; however it is the City who is responsible for repairs and replacements involving equipment, floors, walls, electrical, plumbing, structural and mechanical systems. Because it is the City not the contractor who is responsible for making the repairs, nothing has been added to the proposed agreement with CSC regarding the six-month time frame for repairs.

Staff and CSC propose incorporating a question(s) into the regular customer satisfaction surveys conducted by CSC of FHS pool participants. These questions will measure participant satisfaction with maintenance and housekeeping. Note that surveys are only given to people who use the facility, and consistent with surveying practices and procedures, there is no guarantee that every customer will be surveyed.

All fees are to be set so that in staff’s opinion the City will not lose members to other cities because the fees are too high Regardless of how high or low fees are set, there will always be people dissatisfied with them and who may choose to swim at pools in other cities. The Sunnyvale City Council has consistently supported market-based pricing and strategies for recreation division services. Part of the City’s pricing strategy recognizes that surrounding cities have different tax bases, sources of revenue and policies regarding the level of support provided to recreation services. Given these differences, if the City changes anything more than surrounding Cities (in some cases they are highly subsidized) there is the potential of someone going elsewhere to find a lower priced service. When Council first considered the potential of developing the FHS pool, a number of swim pool supporters responded positively when Council asked if they were willing to pay higher fees to use the FHS pool. That being said, staff, in coordination with CSC, is continually monitoring fees and participation and making adjustments to ensure that fees are set appropriately.

Maintain present punch card/monthly card rate structure and not establish a membership structure The current CSC agreement and admission practices, as well as the new proposed agreement, guarantee a variety of payment options for swim pool users. These options involve daily, punch card, monthly, quarterly, yearly and per class fees. Some groups using the pool whether on a rental basis or sponsored by CSC, such as swim clubs/teams and Masters swim, do operate on a membership basis and would need to continue to do so. These groups


may or may not have “visitor” or “trial” options, but the nature of the activity is membership based.

Extension of up to six months (at discretion of the City Manager) of the existing agreement to allow adequate time for negotiations Staff should not need to extend the current agreement as the new proposed agreement addresses all of Council’s concerns and the recommended contractor is prepared to initiate the new agreement.

Explore the feasibility of a percentage increase in rates for non-residents to be off-set by lower fees for residents Staff looked at the potential impact of increasing the fee differential between what a resident pays to use the FHS pool and what a non-resident pays in order to lower the resident fees. Currently, approximately one third of the paid admission use of the pool is by non-residents, with non-residents paying between 19% and 35% more than residents. Therefore, for every $1 decrease in what residents would pay, non-residents would need to pay $2 more.

To make a meaningful decrease in the resident fee would require increases in the non-resident fee making the fee differential rise to between 35% and 57%, and the fee so high as to discourage their use of the pool. This would in turn result in a decline in non-resident participation as well as overall revenue. The decline in participation would include non-residents working, but not living in Sunnyvale.

Review proposals that the previous Parks and Recreation Commission developed to subsidize the swim programs Staff reviewed the minutes from previous Parks and Recreation Commission meeting. In a meeting held on May 24, 2000, the Commission reviewed the proposed Budget for FY 2000/01 and 10 Year Resource Allocation Plan. Staff believes it is this meeting that Councilmember Swegles is referring to. At that meeting several ideas were floated relating to the budget. Council did not direct staff to pursue any of these ideas. A summary follows. • One Commissioner raised the possibility of applying an across the board

reduction in the amount of planned inflationary increase as a means of identifying funds which could be used to fund supplemental projects. This was suggested as a way for everyone to share the burden – not just one program. The Commissioner expressed his belief that operating budgets would be able to function well with a decreased level of increase.

• Similarly, it was noted that the Report to Council: Annual Review of Fees and Changes for Fiscal Year 2000/01 referenced an inflationary increase of 3% to cover increasing costs of providing services and Commissioners explored the possibility of raising fees 5% instead, as another way to generate additional revenues without creating a hardship.


• Commission made a recommendation to Council that $2.00 be added to all

non-resident golf fees in all categories to help fund supplemental items. Commissioners referred to market survey data on pricing for comparable golf courses provided at a previous meeting by Superintendent of Parks and Golf and noted their opinion that an increase in the non-resident rate by $2.00 would still keep Sunnyvale on a par with the market, and would not negatively impact golf.

• Commission recommended Council consider other funding sources within the budget to fund the Fremont Pool, including but not limited to the Park Dedication Fund.

Facility Projects CSC is proposing to undertake several facility improvement projects to address customer service requests by clients and for improved maintenance. CSC will continue discussions with the City regarding other possible capital improvement projects, such as adding air conditioning to the locker room facility. Planned projects include: • Install a covering or awning over the main entry to protect customers while

registering, checking in, or paying fees. • Install alarm or electronic surveillance devices for improved security and

damage control near offices and entrances of the pool building and pool deck areas.

FISCAL IMPACT Depending on Council’s decision in regard to offering Sunday afternoon open swimming, there are two possible fiscal impact scenarios, corresponding to the two options detailed on Page 11. CSC has proposed a different annual payment to the City dependent on whether the new agreement requires Sunday afternoon open swimming (Option #1) or does not require a Sunday open swim program (Option #2). The following chart compares the anticipated revenue of these two options with the planned revenue from the recommended FY 2007/2008 Long-Range Financial Plan. Planned revenue was estimated prior to completion of negotiations with CSC for this agreement, and was extrapolated from the terms of the existing contract, adding in an inflationary factor. The existing contract was negotiated five years ago. Since then, however, the contractor has noted that his personnel costs have been significantly higher than he had estimated at that time, and so his payments to the City are not proposed to increase at the same rate in the new agreement and also do not exactly match estimates contained in the long-range financial plan.


Option 1 Open Swim Mon. – Fri. 2 Hours/Day;

Sat. & Sun. 3 Hours/Day

Option 2 Open Swim 6 Days a

Week for 2 Hours Each Day

Contract Year

Planned

Revenue from FY07/08

Recommended Long-Range

Financial Plan

Contractor’s Proposed

Payments to City

Difference between Planned

and Proposed Revenue


Payments to City

Difference between Planned

and Proposed Revenue

Year #1 $48,000 $42,000 ($6,000) $48,000 $0 Year #2 $48,960 $42,840 ($6,120) $48,960 $0 Year #3 $51,500 $43,697 ($7,803) $49,939 ($1,561) Year #4 $53,045 $44,571 ($8,474) $50,938 ($2,107) Year #5 $54,636 $45,462 ($9,174) $51,957 ($2,679) Year #6 $56,275 $46,371 ($9,904) $52,996 ($3,279) Year #7 $57,964 $47,299 ($10,665) $54,056 ($3,908) Year #8 $59,703 $48,245 ($11,458) $55,137 ($4,566)

Total for 8 Yrs of

Contract $430,083 $360,485 ($69,598) $411,983 ($18,100) Note: The chart does not include any potential loss of revenue at the other City operated swim pools that currently offer open swimming on Sunday afternoons during the summer months. Option #1 represents a service level increase, which is paid for by a decrease in the proposed annual payment from CSC to the City. The net negative impact to the Community Recreation Fund of this loss of revenue over the eight years of the proposed agreement is $69,598 (as compared to the 20-year planned budget beginning FY 2007/2008). While Option #2 does not represent a service level increase over the current contract agreement with CSC, there is a net negative impact to the Community Recreation Fund of $18,100 over the eight years of the proposed agreement (as compared to the 20-year planned budget beginning FY 2007/2008). This is due to proposed payments to the City by CSC not keeping up with the increases projected in the 20-year budget plan. The proposed payments, however, are consistent with the proposal submitted to the City by CSC in response to the City’s Request for Proposals (#F0610-34, October 30, 2006, Operation of Public Swimming Programs at Fremont High School Pool). CSC cites increased staffing and management costs as the reasons CSC’s payment to the City cannot be increased above the level proposed here.


If Council selects either of these options, staff would recommend that the loss of revenue to the Community Recreation Fund as compared to plan be offset by increasing the General Fund subsidy to the Community Recreation Fund, specifically with funding provided from the General Fund Service Level Set-Aside. The required funding would be $69,598 over an 8 year period for Option #1 and $18,100 over an 8 year period for Option #2. This would be an increase to the subsidy for each of the eight years of the contract that would add to the existing base subsidy from the General Fund to the Community Recreation Fund. For Option #1 the annual increase would be $6,000 in the first year of the agreement, rising to $11,458 in the last year of the agreement. For Option #2, the annual increase would begin in the third year of the agreement at a level of $1,561, rising to $4,566 in the final year of the agreement. The expenditure side of the budget would not be adjusted; rather revenue expectations would be lowered accordingly. This would be reevaluated at the time a new agreement is negotiated. The recommendation to approve a transfer from the General Fund is based on the policy adopted with the FY 2006/2007 budget that any new services approved by City Council that will increase net costs within the Community Recreation Fund will also result in an increase in the Community Recreation Fund through a corresponding increase in the annual General Fund subsidy. Alternately, Council could chose to direct that service levels elsewhere in the Community Recreation Fund be reduced by a commensurate net amount, with the understanding that the services most likely to be reduced would be in the area of youth or senior services, since they are the most heavily subsidized. If Council takes action to establish other specific use policies or set any user fees, such action may affect the financial estimates outlined in this report. Broader Fiscal Context for Fremont High School Pool It should be noted that the contractor’s proposed payments to the City represent only one part of the larger financial picture of the Fremont High School Pool. Under the City’s agreement with the Fremont Union High School District, the City is responsible for a portion of the total maintenance costs for the pool, including the cost of utilities. These costs are partially offset by the payments from the contractor, as detailed in the previous table, as well as by income from the endowment fund set up by Friends of Fremont Pool. The total net costs of the Fremont High School Pool on the Community Recreation Fund are shown in the table below, using the same scenarios as in the previous table: as contained in the recommended FY 2007/2008 Long-Range Financial Plan, for Option #1 and for Option #2.


Net Impact on Community Recreation Fund of Fremont High School Pool

Planned Budget Option #1 Option #2 Contract

Year Estimated

Endow-ment Fund

Income

Estimated Yearly

Operational Cost

Planned Revenue

from FY07/08

Rec. Long-Range

Financial Plan

Net Impact on Comm. Rec. Fund


Payments to City



Payments to City


Year #1 $43,050 $130,421 $48,000 ($39,371) $42,000 ($45,371) $48,000 ($39,371)

Year #2 $43,050 $134,334 $48,960 ($42,324) $42,840 ($48,444) $48,960 ($42,324)

Year #3 $43,050 $138,364 $51,500 ($43,814) $43,697 ($51,617) $49,939 ($45,375)

Year #4 $43,050 $142,515 $53,045 ($46,420) $44,571 ($54,894) $50,938 ($48,527)

Year #5 $43,050 $146,790 $54,636 ($49,104) $45,462 ($58,278) $51,957 ($51,783)

Year #6 $43,050 $151,194 $56,275 ($51,869) $46,371 ($61,773) $52,996 ($55,148)

Year #7 $43,050 $155,729 $57,964 ($54,715) $47,299 ($65,380) $54,056 ($58,623)

Year #8 $43,050 $160,401 $59,703 ($57,648) $48,245 ($69,106) $55,137 ($62,214) Total 8

Yrs $344,400 $1,159,747 $430,083 ($385,264) $360,485 ($454,862) $411,983 ($403,364)

PUBLIC CONTACT Public contact was made through posting of the Parks and Recreation Commission agenda and Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the City Clerk’s office, Library, Parks and Recreation Administration office, Corporation Yard, Community Center, and Senior Center. Notice of the Commission and City Council meetings regarding this report was also distributed to the “Friends of the Parks and Recreation” mailing list (a list of organizations and individuals who have expressed an interest in parks and recreation issues). A copy was also provided to the California Sports Center. Signs have been posted at the Fremont High School Pool advising pool users of the Parks and Recreation Commission public hearing on June 6, 2007, and the City Council public hearing on June 19, 2007. The Parks and Recreation Commission conducted a public hearing at their June 6, 2007 meeting. Two members of the public spoke largely in favor of staff’s recommendation, highlighting key areas of interest to them.


ALTERNATIVES

1. City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and approves an increase in the General Fund subsidy to the Community Recreation Fund of a total of $69,598 over the eight years of the agreement.

2. City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and directs that service levels elsewhere in the Community Recreation Fund be reduced by a net total of $69,598 over the eight years of the agreement.

3. City Council approves Option #2 (Open Swim 6 Days a Week for 2 Hours Each Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years, except that Section 10 would be changed to reflect the payment schedule associated with Option #2; and approves an increase in the General Fund subsidy to the Community Recreation Fund of total of $18,100 over the eight years of the agreement.

4. Other action as determined by Council. RECOMMENDATION Staff is recommending Alternative 1: City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and approves an increase in the General Fund subsidy to the Community Recreation Fund of a total of $69,598 over the eight years of the agreement. Staff’s recommendation is based on the merits of the new agreement that addresses all of the requirements stated by Council at its March 27, 2007, meeting. Staff’s recommendation is also based on the past performance of the contractor. Staff recommends inclusion of a guaranteed open swim on Sundays consistent with Council action on May 15, 2007, to rent the pool for Sunday open swim for summer of 2007 and consistent with programming at the other pools operated by the City. To offset the impact to the Community Recreation Fund of this service level increase, staff is recommending the increase to the annual General Fund subsidy for the duration of the contract. Staff is concerned that significant changes to the agreement could result in CSC withdrawing its proposal entirely.


The Parks and Recreation Commission met on June 6, 2007, and voted 4-0 (Commissioner Kinder absent) to recommend Alternative 1: City Council approves Option #1 (Open Swim Mon. – Fri. 2 Hours/Day; Sat. & Sun. 3 Hours/Day); approves the proposed agreement with California Sports Center as shown in attachment A, for operation of the Fremont High School Swimming Pool commencing on September 1, 2007 for a period of eight (8) years; and approves an increase in the General Fund subsidy to the Community Recreation Fund of a total of $69,598 over the eight years of the agreement. Reviewed by: David A. Lewis, Director, Parks and Recreation Prepared by: John Lawrence, Recreation Supervisor and Jenny L. Shain, Part-Time Manager Mary Bradley, Director, Finance Approved by: Amy Chan City Manager AttachmentsA. Proposed Agreement with California Sports Center

ATTACHMENT A

DRAFT

AGREEMENT BETWEEN THE CITY OF SUNNYVALE AND CALIFORNIA SPORTS CENTER FOR THE MANAGEMENT, OPERATION AND SUPERVISION OF PUBLIC SWIMMING PROGRAMS AT FREMONT HIGH SCHOOL POOL

This Agreement dated ____________________ 2007, is by and between the

City of Sunnyvale, a municipal corporation of the State of California

(hereinafter “City”), and California Sports Center (“Contractor”), to manage,

operate and supervise the public swimming programs at Fremont High School

Pool, for a term beginning on 12:01 a.m. on September 1, 2007, and ending at

12:01 a.m. on August 31, 2015, unless sooner terminated pursuant to the

provisions contained in this Agreement.

Nothing in this Agreement shall become primary to or supercede any part

of the City of Sunnyvale-Fremont Union High School District Agreement dated

July 18, 2000 (as it currently exists or as hereafter amended), regarding the

joint operation of the 50-meter swim pool and adjacent pool building at

Fremont High School.

SECTION 1. DEFINITIONS. As used in this Agreement, the words and

phrases noted, unless provided otherwise, shall have the following meanings:

A. "City Council" means the City Council of the City of Sunnyvale.

B. “City-District Agreement” means an Agreement, dated July 18, 2000,

Between the City of Sunnyvale and the Fremont Union High School District for

the Development and Operation of a 50-Meter Swimming Pool and Related

Facilities at Fremont High School.

C. "Department" means the Department of Parks and Recreation of the

City of Sunnyvale.

D. "Director" means the Director of the Department of Parks and

Recreation of the City of Sunnyvale.

Agreement Between City and California Sports Center Page 2 of 22

E. “District” or “School District” means the Fremont Union High School

District

F. "Contractor’s Employee" means any person employed by and paid

solely by Contractor, for any of the following purposes: (1) to supervise or give

lessons and instructions in swimming; or (2) to assist in the day-to-day

operation of the swimming programs, pool or related activities, including

collection of monies.

G. “Pool” means the Fremont High School Swim Pool, a 50-meter by 25-

yard pool, located at 1283 Sunnyvale-Saratoga Road, California.

H. "Pool Building" means a single-story structure, located at the north

end of Fremont High School Pool (approximately 2,800 sq. ft. in size containing

locker rooms, lavatories, offices, lifeguard control room, teaching/training

room, and storage rooms) located at 1283 Sunnyvale-Saratoga Road,

California.

I. "Swimmers" mean members of the public using the pool facilities.

J. "Shall" is mandatory.

K. “Hours” means any block of time in the water.

L. “Lane Hour” means any one (1) hour block of time in each 25-yard

swimming lane assigned.

M. For the purposes of this report, “Sunnyvale-based business/group”

means any business located in Sunnyvale with a business license

from the City of Sunnyvale or any group whose membership consists

of a minimum of 60% Sunnyvale residents and whose primary

purpose is to serve Sunnyvale residents.

N. “Swim team” means any organization registered with a recognized

US National Governing Body (NGB) for their defined aquatics

program. All users/participants shall be individual members of the

NGB. If no such governing body exists for the activity, none shall be

required.


SECTION 2. EXCLUSIVE USE. City grants to Contractor the exclusive

use of the Pool Building and the City’s portion of the Pool to be occupied only

for publicly offered aquatic-related programs and as a related onsite office, and

for no other purpose. Contractor shall occupy and operate the Pool Building

and City’s portion of Pool use under this Agreement, consistent with the City–

District Agreement. Contractor is granted the exclusive right to provide all

public swimming programs at the Fremont High School Pool other than those

provided by City or its employees in connection with programs authorized and

mutually agreed to by the Director and Contractor. The hours of operation will

be daily between 5:00 a.m. and 10:00 p.m. with specific pool use, including

shared or joint use as outlined in the City-District Agreement, unless agreed

upon by the School District, City and Contractor, and except during times of

closure due to maintenance and repairs, bad weather conditions, or as

modified by written agreement of the parties.

SECTION 3. PRIVILEGES AND DUTIES OF CONTRACTOR. Contractor

shall perform each duty and obligation imposed herein in full compliance with

the Sunnyvale Municipal Code and other ordinances of City, and all applicable

laws of the County of Santa Clara, State of California and the United States of

America and the terms of the City-District Agreement. Specifically, Contractor

shall:

A. Obtain and pay for any business license or permit required by the

Sunnyvale Municipal Code (as it currently exists or as hereafter amended) or

any other City ordinance, or law of the County of Santa Clara or State of

California or the United States of America.

B. Pay any and all taxes including, but not limited to, personal

property taxes, and sales and use taxes assessed against Contractor, or any

possessory interest in the Pool and Pool Building, including inventories used in

performing the duties and obligations under this Agreement.


C. Install a covering or awning over the main entry to protect

customers while registering, checking in, or paying fees. Covering or awning

must be approved by both District and City before installation. Installation to

be completed prior to June 2008 pending approvals.

D. Install alarm or electronic surveillance devices for improved

security and damage control near offices and entrances of the pool building

and pool deck areas. Number of cameras, installation and placement

procedures, and wiring and electrical connection locations are to be approved

by both District and City before installation.

E. Other capital improvements, such as those noted in the Contractor’s

initial proposal as well as others that may be identified in the future, shall be

completed as negotiated with City.

SECTION 4. SCOPE OF PROGRAMMING. Contractor shall:

A. Provide, to the degree that it can be accomplished within the context

of market-based programming, a broad array of swim opportunities (such as

lap swim, masters programs, swim opportunities for children in grades K-12,

swim lessons for all ages, and recreational/family swim opportunities, diving,

water exercise classes, safety and training classes and other aquatic related

activities) as opposed to a narrow scope of programs and all other services

customarily provided by a swim professional, by/with qualified contractor’s

employees;

B. Provide, at an acceptable level to the public, swimming lessons and

instructions and all related services as required by the Director;

C. If possible under market conditions, schedule swim meets at the

Pool and Pool Building for special interest groups so as to assure the best

overall, well-rounded swim program for the community;

D. Operate, manage and supervise the Pool and Pool Building.

SECTION 5. SWIM PROGRAMS. With regard to operating, managing

and supervising the swim programs, Contractor shall:

A. Organize, establish, and conduct fee-based swimming programs


which include the specifically required program elements listed below. With the

exception of adult lap swimming, program schedules are to be set by the

Contractor and excepting closures due to holidays, maintenance and other

conditions outside the control of the Contractor. Program minimums maybe

exceeded at the discretion of the Contractor to meet the public’s needs.

Contractor covenants that the swim programs shall be supervised and/or

conducted by professional personnel, all of whom will have current and legally

approved training, including, but not limited to, certification in

cardiopulmonary resuscitation, use of AED equipment and certification in

lifeguarding (and/or water safety instruction) for the purposes of supervising

public swimming activities.

(1) Contractor shall provide a minimum of 7,000 lane hours of

instructional lessons per year.

(2) Contractor shall provide a minimum of 2,500 lane hours per year

for registered CSC Masters swimmers.

(3) Contractor shall provide a minimum of 8,000 lane hours for local

swim teams of which all ‘teams’ shall have at least 60% resident members in

their entire organization.

(4) Pending school district scheduled end/start of the school year

and as outlined above (Section 5 (A)), Contractor shall provide between 1300

and 1800 lane hours of “open swim” over six to eight weeks each summer

Monday – Friday (2 hours per day mid-afternoon, minimum of 23 lanes) and

between 450 and 600 lane hours of “open swim” over six to eight weeks each

summer Saturday and Sunday (3 hours per day, mid-afternoon, minimum 13

lanes). The total lane hours per summer shall be between 1750 and 2400 for

seven days a week over six to eight weeks.


(5) With exceptions as outlined above (Section 5 (A)), Contractor

shall provide a minimum of 9,152 lane hours of adult lap swimming per year

and shall maintain a consistent year round schedule as follows:

Monday – Friday 6:00am – 8:00am Minimum of 4 lanes

11:30am – 1:30pm Minimum of 4 lanes 6:00pm – 8:00pm Minimum of 6 lanes

Saturday and Sunday

8:00am – 11:00am Minimum of 6 lanes These times and lane numbers must be maintained for unstructured adult lap

swimmers and may not be used for other programs or activities such as

Masters Swimming, swim instruction, coaching, etc.

B. Perform services as may be deemed necessary by Contractor

including, but not be limited to, the following:

(1) Selecting, training, supervising and assuming responsibility for

conduct, appearance and performance of Contractor’s employees;

(2) Providing such equipment and teaching aids as may be

necessary;

(3) Provide priority for reserved use per Contractor’s reservation

policies to Sunnyvale-based businesses/groups vs. non-Sunnyvale-based

businesses/groups.

C. Employing, in connection with the foregoing operations at

Contractor’s sole cost and responsibility, such Contractor’s employees as

deemed necessary; provided, however, that:

(1) Within ten (10) days following receipt of written notice from City

that a particular employee of contractor is not satisfactory to City for good

cause, Contractor shall dismiss that employee forthwith, and

(2) When performing duties for the Contractor, no employee of

Contractor shall be deemed to be an employee, agent or representative of City

at any time or for any purpose and


(3) Contractor shall require all its employees to be neatly dressed

and courteous at all times, and to refrain from boisterous or objectionable

conduct or littering around and about the Pool, Pool Building and Fremont

High School premises.

(4) Contractor shall require and be responsible for any and all

background checks and fingerprinting necessary to comply with applicable

state laws.

D. For the purpose of tracking service levels, provide the City accurate

number of monthly participants in various swim programs offered by

Contractor and its employees at the Pool and Pool Building by the 15th day of

the following month.

SECTION 6. FACILITY SUPERVISION. With regard to facility

supervision, the Contractor shall be responsible for operating, managing and

supervising the Pool and Pool Building, including but not limited to:

A. Enforcing all rules and regulations.

B. Regulating the swimming and conduct of the swimmers.

C. Notifying the Director or their designee of any incident, accident or

injury involving removal from the facility of a participant or contractor

employee by ambulance, police or fire personnel.

D. Supervising the Pool and Pool Building, preserving order,

maintaining cleanliness and providing for security of the Pool and Pool

Building, including keeping trespassers off of the Pool and Pool Building and

preventing injury to the Pool and Pool Building by swimmers and others.

During shared-use times with the District, Contractor is not responsible for

those people accessing the facility

through District’s programs or entryway(s) or for those portions of the pool the

School District uses.

E. Keeping the Pool and Pool Building open for the specified, minimum

number of program hours as identified in Section 5, A 1-5.


F. Keeping locker rooms and lavatories open at all times that the Pool

is open by Contractor for public swimming or related business and keeping

locker rooms closed and locked at all other times.

G. During operating hours, inspecting and maintaining locker rooms,

showers and lavatories to assure clean and operational conditions that meet

health codes and is acceptable for providing public activities.

H. Maintaining Pool Building in a safe, clean, sanitary and acceptable

condition for dealing with the public, reasonably free from trash and rubbish.

I. Repairing and replacing any equipment as required in order to

maintain Pool Building in good condition, with exception of items noted in

Section 12. With the permission of the City, other aquatic-related equipment

may be used and/or stored at the facility by the Contractor.

J. Responding to concerns raised by the public in a timely, professional

and helpful manner which will involve having a staff person at the Pool, or

readily available to answer questions and provide information at all times the

Pool is open for public use.

K. Remove and replace swim pool blankets over the water in

accordance with the City-District Agreement and payment of any penalties due

to failure to replace the swim pool blankets except when unsafe to do so due to

high winds. Contractor will track and report to the City whenever that is the

case.

SECTION 7. SCHEDULE AND FEES. With regard to schedules and fees,

Contractor shall be responsible for:

A. Providing a general twelve-month schedule of pool use (January

through December) by December 1 for each year this Agreement is in place.

The schedule and fees are subject to approval by the Director or their designee.

B. Maintain the minimum number of hours of swim programs as

identified in Section 5, A 1-5, for which the Pool and Pool Building is

to be kept open and appropriately supervised, unless otherwise

mutually agreed to, in writing, between both parties.


C. Establishing all fees on an annual basis (January of each year),

including a potential range or percentage increase, through a

market-based approach and consistent with the City’s enterprise

philosophy, including resident/non-resident fee differentials and

other subsidies where appropriate. The fees are subject to approval

by the City and are to include payment options such as daily punch

card and/or monthly rates for all activities except those activities,

like lessons or team sports, that require pre-registration.

D. Posting and notifying the public of fees and changes to fees.

E. Collecting and depositing all fees, charges and receipts for individual

participation, for individual and group swim instruction, and for all swim

reservations of the Pool and Pool Building.

F. Honoring the rights of participants to waiver of fees, upon

presentation by participants of an authorized City of Sunnyvale fee waiver

form. Contractor shall keep accurate records of all fee waivers and shall

provide City with such records not later than ten (10) days after the end of each

calendar quarter for reimbursement and not later than June 25th for the last

quarter (fee waivers are not valid beyond June 15 of each fiscal year).

SECTION 8. ADDITIONAL DUTIES OF CONTRACTOR. Contractor shall,

in addition to the foregoing duties:

A. At Contractor’s discretion, maintain, sell and rent a stock of

merchandise, supplies and equipment sufficient to meet customer demand and

suitable for use at the Pool and Pool Building including, for example, clothing,

eye goggles, towels, books and other swim equipment and supplies, provided

that the makes or lines of swim merchandise, supplies and equipment so

handled shall be representative, in quality, price and type, of those makes and

lines of swim merchandise generally available to the public in this area.


B. At Contractor’s discretion, maintain and operate vending machines

for the sales of food and beverages provided that within ten (10) days following

receipt of written notice from City that a particular product or machine is not

satisfactory to City for whatever reason, Contractor shall remove or have

vendor remove that product or machine forthwith.

C. Pay all charges for water, gas and electric service to the Pool

Building, which, per the City-District Agreement, will be metered or measured

separately.

D. Furnish and pay all charges for telephone, cable, internet or any

other audio or visual services which relate to the Contractor’s use of the Pool

and Pool Building operations.

E. Furnish and pay all costs in connection with maintaining the

interior of the Pool Building together with routine maintenance thereof, the

janitorial services to include, but not limited to, cleaning of windows (inside

and outside), removal of trash, and the routine maintenance of interior

furnishings, equipment and fixtures. The Contractor shall keep the

appearance of the Pool and Pool Building locker areas in a safe, clean and

sanitary condition, and reasonably free from rubbish during operating hours,

to the satisfaction of City, which expressly retains and reserves the right to

inspect the Pool and Pool Building at any reasonable time for this purpose.

Contractor shall provide and maintain high quality equipment and other

interior furnishings or devices required to operate the Pool and Pool Building.

F. Furnish and pay all charges for office supplies.

G. Contractor, at Contractor's own expense, may with the written

approval of City change the locks on the rooms covered by this Agreement. If

Contractor chooses to change the locks, two (2) master keys must be submitted

to City immediately upon making such change. The City, at its option, may

make copies of the master keys available to the School District for maintenance

and emergency purposes.


H. Communicate through the City any problems or concerns regarding

issues covered by City-District Agreement.

I. Conduct a customer satisfaction survey of participants no less than

annually and receive a minimum average of “very good” on services and

maintenance that are under the control of the Contractor. On a scale of 1-5,

“very good” is 4.

SECTION 9. PROHIBITED ACTIVITIES. Contractor shall not do any of

the following without having first obtained the written consent of City:

A. Install or permit installation or use of any pinball machine, video

game or similar equipment.

B. Except on approved bulletin boards , attach, hang or otherwise affix

any sign or advertising matter on the exterior or interior of the Pool or Pool

Building.

C. Allow any newspaper rack, vending machine or other sales device to

be placed and maintained outside the Pool or Pool Building whether attached

or free-standing, or anywhere in the Pool and Pool Building, except as

authorized herein.

D. Permit third parties to distribute or sell goods, wares or merchandise

either within the interior or exterior of the Pool or Pool Building, or anywhere

on the Fremont High School property; except what may be allowed under

Section 8, A.

E. Assign or transfer this Agreement or any of the rights or privileges

herein granted, or any part thereof. This Agreement cannot be assigned

involuntarily or by operation or process of law.

F. Make any alterations, changes or additions to the Pool or Pool

Building, or to any fixtures or equipment owned by City or School District

without first having obtained written consent of City or School District, as

appropriate, and provided that any alterations, changes or additions consented

to shall be made at the sole cost of Contractor and shall become the property of

City and/or School District upon termination of this Agreement.


G. Let, sublet or assign the Pool or Pool Building, or any portion

thereof.

H. Commit, permit or allow any nuisance or waste in, or injury to the

Pool or Pool Building or any portion of either, or to permit the use of the Pool or

Pool Building for any illegal or immoral purpose.

I. Have any financial or other interest in the control, operation or

promotion of any other swim program or establishment located within three (3)

miles from the Fremont High School Pool, it being the intent of the City of

Sunnyvale that the management and operation of the Pool and Pool Building

shall be the sole swimming program offered by the Contractor within the

immediate area, unless otherwise agreed upon by the parties.

J. Owners or Directors of Contractor or site manager/supervisor,

without permission from the City, become an officer or member of any swim

club or organization of swimmers formed or to be formed at the Pool or Pool

Building or in any organization in which participation would conflict or create

the perception of conflicting, with the City’s desire to provide reasonable public

access to a broad array of aquatic programs held at the Pool and Pool Building,

particularly in situations involving the granting of swimming privileges.

K. Bind or attempt to bind City to any contracts or other obligations of

any nature.

L. Use or instruct in the use of any scuba equipment in the Pool.

M. Offer or provide any discount, special privileges or service to a City

employee that is not also available to the general public.

SECTION 10. DEPOSIT, PAYMENTS TO CITY, RECORDS AND ACCOUNTS.

A. Contractor, in consideration of the privileges and rights allowed by

this Agreement, shall pay to the City a fee of $42,000.00 for the first year with

an additional 2% of the previous year’s payment added to each of the following

seven (7) year payments.


B. Payments are to be in quarterly installments, each to be one-quarter

of the annual amount to be paid to the City and are due within 15 days of

receiving an invoice from the City and no sooner than 15 days following the end

of each quarter.

C. Contractor shall maintain on a current basis complete records from

which the attendance and scheduled use (from all sources) can be readily

ascertained. Contractor shall furnish any and all information and reports on

the aforementioned information which may be required by City, shall permit

access to books, records and accounts by City or its representatives upon

demand for the purposes of investigation to ascertain compliance with all

applicable rules, regulations, and orders and for the purpose of evaluating and

monitoring Contractor's performance and compliance with the provisions of

this Agreement.

SECTION 11. COMPENSATION OF CONTRACTOR. Contractor, as

compensation for the services performed under the terms of this Agreement,

shall be entitled by City to keep and retain all fees (including non-resident

differential) and revenues collected from all operations of the Pool and Pool

Building less the amounts paid to City pursuant to SECTION 10.

SECTION 12. DUTIES OF CITY. City shall, in conjunction with

Contractor's service, do or have done by the City and/or the School District

pursuant to the City-District Agreement, the following:

A. Publicize the Contractor’s swim program at Fremont High School

pool with a minimum of one (1) page in the Department's "Activities Guide".

B. Reimburse the Contractor for waivers of fees honored pursuant to

SECTION 7.F.

C. Work with the Contractor in the promotion of swim meets and swim

programs as related to Department-sponsored or special agreement swim

programs.

D. Pay all charges for utilities furnished other than those to be paid for

by Contractor.


E. Maintain the Pool and appurtenant structures, including but not

limited to diving boards, stands, ladders, bleachers, posts and poles, lighting

and other plumbing or electrical systems, fences, grounds and adjacent

improved off-street parking areas.

F. Be responsible for maintaining the structural elements and systems

of the Pool and Pool Building, including the roof, in the condition existing at

the time the Contractor takes possession of the premises, excepting normal

wear and tear, consistent with the terms of the City-District Agreement.

“Structural elements and systems” includes skylights, foundation, footings,

floor slab, flooring, structural walls, parking areas, and plumbing, electrical

and heating systems. If the state of disrepair (except normal wear and tear) is

due to the action of the Contractor, its agents or clients, necessary repairs or

replacements shall be charged to Contractor as additional rent.

G. Repair and replace all broken windows within the Pool Building

other than any broken as a result of any act of negligence by Contractor, it’s

agents or clients.

H. Purchase and replace water polo nets, lane lines, backstroke flags,

pool blankets, reels, starting blocks, diving boards, and handicapped lift when

necessary, (consistent with the City-District Agreement) other than any damage

as a result of any act of negligence by Contractor, its agents or clients in which

case necessary repairs or replacements shall be charged to Contractor as

additional rent.

I. Reserve, clearly mark and monitor thirty-four (34) parking spaces for

the Pool during the normal school year (typically late August through mid-

June) as detailed in the City/District Agreement.

J. Meet at least quarterly on location with District and Contractor to

review pool site issues, equipment, and maintenance.

SECTION 13. INDEMNIFICATION. Contractor shall indemnify and hold

harmless the City of Sunnyvale and the School District, their officers,

employees and agents, from and against any and all claims, demands, orders,


decrees or judgments for injury or death or damage to person or property, loss,

damage and liability (including all costs and attorneys' fees incurred in

defending any claim, demand or cause of action), occasioned by, growing out

of, or arising or resulting from any act or omission on the part of Contractor, or

its agents or employees, arising or resulting from the performance of any

services required herein to be performed by Contractor or arising from the use

of the Pool or Pool Building by Contractor, or its agents, clients or employees,

or arising from the use of any buildings or improvements thereon or therein by

any person or persons, or arising out of the operation or maintenance of

dangerous or defective condition of the Pool or Pool Building, or any other

structure, facility or thing erected or placed in the Pool or Pool Building and

under the control or supervision of the Contractor.

SECTION 14. INSURANCE. Contractor shall and will, during the period

commencing on the date on which this Agreement is issued and continuing

without interruption until this Agreement is canceled, revoked or otherwise

terminated, and at its own cost and expense, provide and maintain in such

form and with a company or companies satisfactory to City and District, a

policy or policies of each of the following types of insurance to wit:

A. Single-limit coverage applying to bodily and personal injury liability,

including liability for death, and property damage, or a combination thereof, in

an amount not less than One Million Dollars ($1,000,000) per "occurrence"

basis with a minimum Two Million Dollars ($2,000,000) aggregate; provided,

however, as follows:

(1) City and School District shall be separately named as an

additional insured in all of said insurance policies;

(2) A contractual liability endorsement shall be included in each

insurance policy, extending coverage to include the liability assumed under

Paragraph A; and

(3) Professional liability or errors and omissions coverage.

B. Workers Compensation Insurance and Employers Liability


Insurance for all employees of Contractor in statutory limits.

D. Any policy of insurance required of Contractor shall also contain an

endorsement providing that thirty (30) days' notice must be given in writing to

City and to District of any pending change in the liability or of any cancellation

or modification of the policy.

E. In the event of a serious accident or incident involving a response by

emergency personnel (police, fire, ambulance) or an event deemed to potentially

involve a lawsuit against the Contractor, District or City, the Contractor shall

contact the City’s contract liaison or the Director immediately following the

conclusion of any emergency actions or procedures.

F. Contractor shall fill out and forward to the City and to District a

comprehensive accident report on any injury deemed to be serious or

potentially involving a law suit that takes place in and around the Pool or Pool

Building within two working days (a working day being typically Monday

through Friday but not including those holidays during which the Pool and

Pool Building is closed).

G. Contractor shall have the sole responsibility of insuring (if it so

desires and at its own cost and expense) any furnishings, fixtures, equipment,

merchandise and supplies required to be provided under the terms of this

Agreement against loss or damage from fire, theft or any other cause.

SECTION 15. BOND REQUIREMENTS. Contractor, before exercising

any of the privileges and rights set forth in this Agreement, and at its own costs

and expense, shall deposit and maintain with City at all times, a minimum of

Five Thousand Dollars ($5,000) in cash or bond, to guarantee full and faithful

performance of all the duties, obligations, covenants and agreements contained

in this Agreement to be performed by Contractor or any employee of

Contractor, including, but not limited to, payment of monies required to be

paid to City at the times and in the manner specified in this Agreement. City

may make withdrawals from this guarantee fund to cover the cost of failure to

fully and faithfully perform as stated above, or to reimburse City monies


required to be paid to City which are not so paid. Contractor shall deposit

additional monies to replenish the guarantee fund upon being billed by City for

withdrawals from the fund. Any balance remaining shall be returned to

Contractor upon the termination of this Agreement, provided that Contractor or

any employee of Contractor is not in default in the payment of any monies

required to be paid to City, or in the performance of any duty, obligation,

covenant or agreement contained herein.

SECTION 16. TERMINATION.

A. City reserves the right to terminate this Agreement:

(1) If at any time Contractor is in default in the payment of any fees

or any other monies required to be paid to City, or in the performance of any

duty, obligation, covenant or agreement contained herein (time expressly

declared to be of the essence), upon fifteen (15) days written notice to

Contractor and Contractor fails to correct such default within the fifteen (15)

day period; provided, however, that:

(a) Contractor shall not be entitled to and expressly waives

any other form of demand or notice (written or oral);

(b) City shall have the full right, at its election, to enter Pool

and Pool Building and take immediate and sole possession thereof;

(c) City shall have the right to bring suit for and collect all

monies required to be paid to City and which shall have accrued up to the time

of entry described above;

(d) Upon such termination, this Agreement and all rights and

privileges herein agreed to shall become void to all intents and purposes

whatsoever; or

(2) If Contractor fails to keep in full force and effect at any time the

policies of insurance or faithful performance deposit required above upon

fifteen (15) days written notice to Contractor and Contractor fails to correct

such default within the fifteen (15) day period.

B. Either party may terminate this Agreement for any reason upon six

(6) months written notice to the other.


SECTION 17. DEFAULT AND BREACH BY CONTRACTOR: If the City so

chooses, this Agreement and all rights and privileges herein shall immediately

(and without any demand or notice written or oral) cease, determine, come to

an end, and become void, and the City immediately may enter Pool and Pool

Building and take immediate and sole possession thereof, without prejudice to

the right of City to recover from Agreement all unpaid monies required to be

paid to City and which shall have accrued up to the time of the entry described

above, if:

A. Contractor at any time during the term of this Agreement becomes

insolvent, or if proceedings in bankruptcy shall be instituted by or against

Contractor, or if Contractor shall be adjudged bankrupt or insolvent by any

pool owner, or if a receiver or trustee in bankruptcy or a receiver of any

property of Contractor shall be appointed in any suit or proceeding brought by

or against Contractor, or if Contractor shall make an assignment for the benefit

of creditors, or if any action is taken against or suffered by Contractor under

any insolvency or bankruptcy act.

B. By reason of incapacity, or otherwise, Contractor is unable to

perform the duties, obligations, covenants or agreements contained herein for a

period of ninety (90) consecutive days.

SECTION 18. SURRENDER OF PREMISES AND REMOVAL OF

PROPERTY.

A. Upon expiration of the term of this Agreement, or upon the sooner

termination of such term from whatever cause, Contractor:

(1) May remove any and all furnishings, fixtures, equipment,

merchandise and supplies installed or purchased by Contractor; provided,

however, that:

(a) Any item of personal property described above not so

removed shall be deemed abandoned by Contractor to City and absolute title

thereto shall vest in City immediately;


(b) Contractor is not then in default in the payment of any

fees, portion of gross revenue or any other required to be paid to City, or in the

performance of any duty, obligation, covenant or agreement contained herein;

(c) Contractor shall leave the Pool and Pool Building

appurtenances in good order, condition and state of repair, reasonable wear

and tear and damage by the elements excepted, together with any alterations,

changes, additions or improvements thereto; and

(d) Contractor shall be responsible for any damage to the Pool

or Pool Building and occasioned by the removal of any furnishings, fixtures or

equipment; and for such damage, if any, City shall have lien on the items of

personal property until such damages be paid.

(2) Shall peaceably and quietly leave, surrender and yield up to

City and District the Pool and Pool Building.

B. In the event of termination of this Agreement, because of the default

of Contractor upon any of the grounds set forth above or in the event of the

automatic termination of this Agreement, City reserves the right to remove any

personal property belonging to Contractor from the Pool and Pool Building and

to store such personal property at the sole cost and expense of Contractor, and

City shall have a lien on such personal property for and until all and any

storage charges are paid.

SECTION 19. DISCRIMINATION PROHIBITED. Neither Contractor nor

any officer, agent, or employee thereof shall discriminate in the employment of

persons to perform any service or activity at the swim facility, or discriminate

against any person in the use or access to the Pool or Pool Building on account

of race, color, national origin, ancestry, religion, sex, sexual orientation,

physical handicap, or medical condition in violation of any law, or on account

of any other basis for discrimination prohibited by law.


SECTION 20. NOTICES. Any action, notice or request required to be

taken, given or made by City hereunder may be taken, given or made by the

City Manager of City or such other person or persons as they may authorize for

the purpose.

A. All notices, requests or other papers required to be given or delivered

to Contractor shall be deemed to be duly and properly given or made if mailed

to Contractor, postage prepaid, addressed to:

California Sports Center c/o: David Peterson, Director 838 Malone Road San Jose, CA 95125

or personally delivered to Contractor at such address, or at such other address

as Contractor may designate in writing to City.

B. All notices, requests or other papers required to be given or delivered

to City shall be deemed to be duly and properly given or made if mailed to City

postage prepaid, addressed to:

Director of Parks and Recreation City of Sunnyvale City Hall Annex P.O. Box 3707 Sunnyvale, CA 94088-3707

or personally delivered to Director of Parks and Recreation at City Hall, 650

West Olive Avenue, Sunnyvale, California, or at such other address as City may

designate in writing to Contractor.

SECTION 21. ATTORNEY FEES. The prevailing party in any action

brought to enforce the terms of this Agreement or arising out of this Agreement

may recover its reasonable costs and attorneys' fees expended in connection

with such an action from the other party.


SECTION 22. NATURE OF AGREEMENT. MODIFICATIONS.

A. This Agreement does not constitute a contract of employment and

the relation of master and servant, employer and employee, does not and shall

not exist between City and Contractor or any of its employees. Contractor is

and at all times shall be deemed to be an independent contractor.

B. This Agreement does not constitute a deed or grant of any easement

by the City of Sunnyvale and does not constitute a lease.

C. No assurances or inducements of any kind not specifically set forth

in the Agreement have been made to Contractor by anyone authorized by City

to cause Contractor to execute this Agreement.

D. Failure of City or Contractor to insist upon a strict performance of

any of the duties, obligations, conditions, covenants or agreements contained

in this Agreement shall not be deemed a waiver of any subsequent breach or

default in the duties, obligations, conditions, covenants or agreements herein

contained.

E. Rights of City or Contractor hereunder shall be cumulative and not

alternative and shall be in addition to any and all rights which either party

shall have as a matter of law.

F. No agent, officer or employee of City has any authority to vary or

extend the term of this Agreement or any duty, obligation, covenant or

agreement contained herein, or to make any statements or representations

concerning this Agreement, or the rights and privileges set forth herein, except

such as are set forth in any written addendum to this Agreement which has

been approved by the City Council.

G. This document represents the entire agreement between City and

Contractor. This agreement may be amended only by written instrument,

signed by both City and Contractor. Except as may be expressly provided in

this Agreement to the contrary, all provisions of this Agreement are expressly

made conditions.


IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS

AGREEMENT.

ATTEST: CITY OF SUNNYVALE ("CITY") By ___________________________ By _____________________________ City Clerk City Manager APPROVED AS TO FORM: CALIFORNIA SPORTS CENTER

(“CONTRACTOR”) By ___________________________ By _____________________________

City Attorney David M. Peterson, Director

REPORT TO MAYOR AND COUNCIL NO: 07-214 Council Meeting ...

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