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Adhoc Committee for Rec Facility Minutes 2012 07-09-12 APPROVED 8/28/12 UNITED CITY OF YORKVILLE Ad Hoc Committee for Recreation Facility Alternatives Committee Meeting City Hall Conference Room Monday, July 9, 2012 Call to Order: Chairman Chris Funkhouser called the meeting to order at 7:00 p.m. Establish a Quorum: Present: Chris Funkhouser, Chairman, Alderman Jackie Milschewski, Alderman Larry Kot, Alderman George Gilson, Alderman Deb Horaz, Park Board Seaver Tarulis, Park Board Amy Cesich, Park Board City Officials Present: Bart Olson, City Administrator Other Guests: Andrew Bobbitt, YMCA Rebecca Mophey, YMCA Brian Weiss, YMCA Tony Scott, Record Newspaper Lisa Peterson, Yorkville Resident Judy Burks, Yorkville Resident Don Burks, Yorkville Resident Citizens Comments: None. Previous Minutes: The minutes from the June 11, 2012 meeting were approved. Motion made by Larry Kot and seconded by Jackie Milschewski. New Business: None. Page 1 of 6 Old Business: YMCA Partnership Options: Alderman Funkhouser stated at the last meeting it was decided the YMCA and the city staff would get together and create a proposal and there is a draft in front of the committee for review tonight. Mr. Bobbitt stated he took an agreement and streamlined it - the numbers still need to be firmed up and it is not yet complete, there needs to be additional discussions. Mr. Bobbitt said a conversation can be started to work out the key points and details in the agreement. Mr. Bobbitt said finances are the next critical thing that needs addressed. Mr. Bobbitt stated Bart Olson and he have had discussions on the budget. Mr. Bobbitt said repairs, damage and equipment replacements would have to be worked out, as to how that would be paid for. Mr. Bobbitt said if there was a surplus or a loss, that would need to be worked out in the partnership. Mr. Bobbitt stated as far as finances, the city needs a number they are looking at per month as a target. He stated different factors could be looked at with water/sewer bills and rent etc. Bart Olson said that target number is $17,500 per month. Bart Olson said this is a basic landlord/tenant agreement. Bart stated currently it is structured for the YMCA to have control over operational expenses, if there is a deficit, the city and YMCA split the difference the same with surplus. Bart said city would be responsible for repairs, which is pretty standard. Bart said the concept on the table is does the city want to give the YMCA operational control to manage the facility. Bart said a new facility could not be paid for based upon the premise there would be no customer base, as there is currently. The REC Center has a revenue coming in to sustain itself. Constructing a new facility would raise taxes and would have to be a referendum. Alderman Kot asked if the city buys the REC Center and agrees the YMCA will manage it, the YMCA can walk away after five years. Alderman Funkhouser said he caught that too and he would not want the city left on the hook for fifteen years. After five years, the members would have the choice to stay with the YMCA or stay with the REC Center, which would be a challenge. Mr. Bobbitt said when this was presented to the board, the board voiced concern about protection. Mr. Bobbitt said the YMCA anticipates a long term relationship. Mr. Bobbitt said it wouldn't make sense to have a five year relationship, but there is a risk and no guarantees, so the board was concerned if it is not in the best interest in the YMCA, we wouldn't want to be locked in for 20 years. Alderman Funkhouser said that is a concern for both sides. Deb Horaz said the maintenance is concerning. Mr. Bobbitt said that needs to be a future discussion for dollar values etc. Brian Weiss asked about the city finances and if there is not money for the facility, how do you have 4 million to purchase the REC Center. Mr. Weiss asked if it makes more sense for the city to put the money into a new facility or put it into a 20 year old building. Mr. Weiss stated if it was him, he would want to partner on something new and not the 20 year old building. Bart said there is an existing budget and an existing customer base and it is about breaking even. Bart said there are risks involved in doing a new facility with unknown expenses and customer base might not follow. Mr. Weiss said the maintenance and repairs will then be on the city. Bart said the city estimated in the budget maintenance costs. Page 2 of 6 Bart said the city is looking at the purchase agreement because there are few variables that will change. Don Burks asked the question if the YMCA takes over programming what happens to the outside programs the REC Center offers. Mr. Burks said a lot of the programs take place outside of the REC Center. Bart said that is for the Park Board and City Council to decide. Bart said it would significantly change the amount of programs that are offered. Mr. Burks asked about a bond to build a new facility for 4 million what kind of tax would the residents be looking at. Bart stated over a 20 year period $100 per year roughly or less. Mr. Burks suggested that could be a possibility. Mr. Weiss said he feels more people will join a new facility that is state of the art with more amenities. Mr. Burks asked if in November this could be put in the referendum for the people to decide. Bart said the referendum has to be approved by August, but it is possible. Mr. Burks asked if the city can get a bond. Bart said yes it is possible. Mr. Burks said if there is a partnership with the YMCA, the costs would be half. Mr. Bobbitt said the board feels a new facility can provide better services for the community. Mr. Weiss said the board is only at this discussion because they want to do the best for the community. Mr. Weiss said any option beneficial to the city, YMCA and residents is open for discussion. Alderman Gilson said the referendum has been discussed in the past and he thinks the citizens should be able to decide. Mr. Weiss said if the city does this on it's own, and the YMCA opens a new facility, we are competing again. Alderman Kot said the agreement before the committee tonight states the YMCA has no interest in being co-owners on the REC Center. Mr. Bobbitt said yes that is what the board felt. Alderman Kot asked if the YMCA would want to be co- owners on a new facility. Mr. Bobbitt said yes, the board likes that idea, but the finances on the city side was holding back the idea. Alderman Funkhouser said the majority of the council is apprehensive on moving forward on a new facility without the residents deciding. Alderman Funkhouser said the operational partnership seems to not be getting very far. Alderman Funkhouser said to get this on a referendum in November, we will have to work quickly. Alderman Kot said these numbers and location will have to worked out in a very short amount of time. Deb Horaz asked how the 50/50 partnership works. Mr. Bobbitt said other cities set it up if they were to part ways, the building could be divided and operated separately. Deb voiced her concerns on who runs what and who pays for things. Lisa Peterson asked how things would work if the members can use all three YMCA's. Mr. Bobbitt said that would have to be outlined in the agreement. The committee voiced concern on partnership. Mr. Bobbitt said he can research more on the 50/50 partnerships. Mr. Burks stated he likes the idea of partnering on a new facility. He stated more people that he talks to don't feel it is a good idea for the city to purchase the REC Center. The committee discussed if there is still money owed on the REC Center and if that would be a problem if the city is to purchase the REC Center. Alderman Kot asked how other governmental entities, such as the school district, would be affected by the loss of tax revenue since the YMCA and City are both exempt on taxes. Bart said the tax issue will not affect any governmental body unless they decided to reduce their levy the following year; it would just get redistributed to the taxpayers Page 3 of 6 Alderman Kot asked how loosely can we word this on the referendum. Bart said non-binding it can be very loose. Alderman Funkhouser said it could be done. Bart said for a binding one, it would be hard to accomplish in a short amount of time. Bart said there are some city owned properties that are four to five acres that would work for a facility. Alderman Gilson asked if the city can put this on referendum as a 4 million bond to partnership with the YMCA to get a feel of what the residents want. The committee discussed also adding the question of should the city purchase the REC Center onto the ballot so the residents can decide. Alderman Funkhouser said a new facility is 24-30 months to build and the city has one year until the current lease is up. Mrs. Burks said the YMCA could absorb some of the programs for the kids. Mrs. Burks said the membership at the REC Center is more costly for families than the YMCA. Alderman Kot said if the city council agrees to go forward with the referendum, the city needs an agreement with the YMCA that they want to do a joint venture before this is done. Alderman Funkhouser asked if this committee wants to recommend to the council to move forward on this partnership based on the results of the referendum. Mr. Bobbitt said the YMCA board showed interest in this. Bart said there needs to be a dollar amount and potential property tax increase to put on the referendum in the next couple weeks. Amy Cesich said she is confused and asked Alderman Gilson about being against this because of money and now he is in favor of a referendum. Alderman Gilson stated he doesn't want to purchase the REC Center because it is a money pit. Amy asked Mr. Bobbitt if he would purchase the REC Center. Mr. Bobbitt said the YMCA looked at it before and turned it down for many reasons. Amy said new facilities are costly around 8 to 12 million dollars. Amy asked if the YMCA builds a new facility themselves what is their cap? Mr. Bobbitt said that has not been determined yet. Amy said the REC Center has revenue from memberships and from the businesses that rent in the building. Amy said the city has a building that will create revenue for the city. Amy said she doesn't see why the city would want to move forward on the referendum. Alderman Funkhouser said that if we lose any of the tenants at the REC Center, the budget could be blown. Alderman Funkhouser stated that is a big risk the city takes and it is an issue we need to be concerned with. Alderman Gilson stated he would like the residents to decide if they want a REC Center or not. Alderman Funkhouser stated the new facility was always under consideration the city looked at it with the schools. Lisa Peterson stated the residents need to be asked if the city should spend their money. Lisa stated that if she is asked if the city should buy the REC Center, she would say no, but a new facility, she would consider it because she feels the REC Center is not a good investment. Alderman Milschewski asked if the city partners with the YMCA is it okay if the city doesn't have the cash up front. Alderman Funkhouser said there are different options available to the YMCA and the city would have to bond for their part. Deb asked if the city bonds will that keep the city from bonding for things the city would need in the future. Bart said the city is way under the cap, so it would not be a problem. Alderman Kot asked about going to referendum and delaying the decision another few months will this affect the negotiating process with the Walkers. Page 4 of 6 Bart said that is tough to say it might and might not. Bart said Mr. Walker can take offers, but not solicit them. Deb asked what if the referendum gets turned down. Alderman Funkhouser said then the city considers all the other options. Amy asked what will the direction of Parks and Recreation be. Amy said this building encompasses a lot of things, so if we are putting this on referendum, then why not ask the residents if they want a Park District. Amy stated the issue has always been the residents don't want their taxes to go up. Lisa Peterson said she is not comfortable with the private deal with the Walkers, the building is 18 years old, the city already had to put in new air conditioning at the city's expense, and there are issues with the roof. Ms. Peterson said the city needs to get rid of the REC Center all together. Mr. Bobbitt stated the YMCA could provide savings to the city. The REC Center members are fitness based. He said there are duplications in the budget where the city can save money by not operating the REC Center. Mr. Bobbitt said the scholarships can save because as a charity, YMCA can solicit and find those donors and the city doesn't have to provide that. Mr. Bobbitt talked about different amenities that residents wanted in previous surveys and the costs. Alderman Funkhouser said this is a policy decision for the city - does the city want Parks and Recreation or just parks. Alderman Funkhouser said the city will always have parks and as recreation outdoor athletics programs. Alderman Funkhouser said if we don't have the REC Center, it will cause programs and staff cuts. Deb said you will decimate recreation in Yorkville. Mr. Weiss asked what specifically Deb thought the residents of Yorkville will not have access to. Alderman Funkhouser said if we don't have the REC Center, the YMCA will build a facility and will offer all of those classes that would be lost. Mr. Weiss said they will offer Zumba, cheer, or whatever the REC offers. Mr. Burks said by partnering with the YMCA it expands programs. Alderman Kot asked about a committee consensus on the agreement before us tonight. Mr. Bobbitt said the YMCA and staff worked together to bring this together tonight. Amy asked what is the YMCA's preference co-manage the REC Center or build a new facility. Mr. Bobbitt said there is more traction by the board to build a new facility and it makes more sense than the old. Mr. Weiss asked if money wasn't an object, what would you rather do buy the old or build new. Amy said of course a new facility would be great, but when the city has a revenue source and can offer all the programs, not cut staff and break even or make a surplus why not use it. Alderman Funkhouser said there are three things we need consensus from the committee on in front of us. First, the proposal in front of us, second, a 50/50 venture which means a referendum and recommend to the council to move forward and third, does the city want to look into the numbers on the contract in front of us. Amy said the referendum question depends on details. Alderman Funkhouser said the city will not stop discussions or negotiations. Alderman Funkhouser said for now, we need to decide how we want to move forward. Do we want to take this to council to move forward with a referendum. Alderman Kot said the agreement before us is not in the best interest of the City of Yorkville and he doesn't want to move ahead with it. Alderman Kot does support moving ahead with bringing the referendum before city council provided the YMCA comes back with positive feedback from their board. Page 5 of 6 Alderman Milschewski said she would like to see the results from a referendum. Amy said she agreed with Alderman Kot the agreement before them tonight is not good for Yorkville. Amy said she would like more information for a referendum and then she would agree with doing the referendum. Alderman Funkhouser said it is a general poll. Committee agreed no on the proposal tonight. Committee agreed to move forward on the referendum. Alderman Kot said the contract before them tonight is a high risk because after five years the YMCA can leave. Alderman Kot said if the city is going to buy the REC Center, the city will buy it and run it ourselves. Mr. Bobbitt said if there are things the city doesn't like, it can be negotiated. Alderman Milschewski said if the city buys the building, we already have staff and the city can run it. Alderman Funkhouser said the consensus is to move forward with the referendum and send a recommendation to council to move forward with a non-binding referendum on a joint venture with the YMCA. Adjournment: Motion to adjourn made by Larry Kot and seconded by Jackie Milschewski. Meeting was adjourned at 8:53 p.m. Minutes Respectfully Submitted by: Lisa Godwin Page 6 of 6