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City Council Minutes 2011 06-14-11 special meeting SPECIAL CITY COUNCIL MEETING MINUTES OF THE JOINT MEETING OF THE CITY COUNCIL AND THE PARK BOARD, HELD IN THE CITY COUNCIL CHAMBERS, 800 GAME FARM ROAD ON TUESDAY,JUNE 14,2011 Mayor Golinski called the meeting to order at 5:32 p.m. ROLL CALL/INTRODUCTIONS City Council present: Park Board members present: Mayor Golinski Ken Koch Alderman Colosimo Debbie Horaz Alderman Milschewski (arrived at 5:37 p.m.) Vickie Coveny Alderman Kot Seaver Tarulis Alderman Munns Mark Dilday Alderman Funkhouser Alderman Spears Alderman Teeling Also present: Deputy City Clerk Pickering, City Attorney Orr, City Administrator Olson, Chief of Police Hart,Finance Director Fredrickson,Building Code Official Zabel, Superintendent of Parks Sleezer, Superintendent of Recreation Evans,Park Designer Schraw, Office Supervisor Reisinger,and Recreation Coordinator Rosborough. REC Center Mayor Golinski stated that the City Council and the Park Board will need to make a decision by December of 2011 as to the fixture of the REC Center. He asked Administrator Olson to give an overview of the REC Center. Administrator Olson said that in 2007,the city started negotiations with the Walkers over the purchase/lease of the REC Center. The negotiations started at a staff level to see if the purchase/lease of the REC Center was feasible,then in 2008,the discussion moved to the Park Board and the City Council. Administrator Olson stated that the lease agreement was approved and on July 1,2008, the city starting operating the REC Center as a fitness facility. Since the city took over the REC Center, the city has expanded the offerings in the hopes of turning the REC Center around financially. Park Board President Koch commented that when he started on the Park Board, all of the recreation programming was run out of the Beecher Center. After the Countryside Shopping Center was tom down, Senior Services needed a home and the decision was made that Senior Services would be moved into the Beecher Center. As a result of losing their programming space at the Beecher Center,the recreation department was forced to schedule their programs out of multiple facilities in town. Logistically,the scheduling became difficult and the Park Board started to look for a home for the recreation programs. Superintendent of Recreation Evans gave an overview of the information in the packet regarding the REC Center operations. He stated that the REC Center membership had increased as they were adding new members all the time. Alderman Colosimo questioned how many members there were in 2009 as compared to current. Administrator Olson said that in 2009,there were 600—700 members compared to 1498 members currently. Alderman Spears questioned how many city employees had free memberships? Superintendent Evans stated that including city employees and the Walker family,there were approximately 30 free memberships. He went on to say that the chart in the packet shows only the paying members. Alderman Munns questioned if staff knows where the new members are coming from. Superintendent Evans explained that the city does not currently ask new members this; however, it is something that could be tracked in the fixture. He also stated that since he took over in December 2010, the memberships started rising. He said that May 2011 was showing very strong numbers compared to the previous two Mays. Superintendent Evans went on to explain that even though the tax bill the REC Center received in May increased by$3,000 over last year,he was able to reduce expenses by$15,000 compared to May 2010. Park Board President Koch stated that the two big expenses that the REC Center is faced with are the lease payment and the property taxes. Superintendent Evans said that staff is also looking at the numbers for all of their programs. One example is that the recreation department formerly did not offer Zumba classes. They started offering this class and have found it to be very successful. Alderman Kot stated that recreation programs are usually not self sufficient and he questioned if there were historical numbers available for the recreation programs prior to the city taking over the REC Center so that they could compare to see if there were deficits being run back then. Mr.Evans explained that staff could go back and pull the numbers;however, everyone should The Minutes of the Special Meeting of the City Council—June 14,2011—page 2 be aware that the city did not have the REC Center then and the REC Center cost is the reason that there is a deficit. Mr.Evans further explained that for any program that the recreation department runs,there is a formula in place to make sure that the individual classes are not running at a loss. Administrator Olson clarified that there are two figures that are being questioned,the first is budgetary deficits(meaning how well staff has adhered to the budget each year)and amount of subsidy, i.e.transfer from the general fund. Mr. Olson explained that almost none of our services make money so that's why we have taxes to support the services that residents receive. He stated that the general fund transfer includes parks as well as recreation. According to Administrator Olson,the 2005-2006 transfer was $755,000,the 2006-2007 transfer was$1.01 million,the 2007-2008 transfer was $1.16 million,the 2008-2009 transfer was $1.08 million,the 2009-2010 transfer was $975,000,the 2010—2011 transfer was$950,000 and for the current year the transfer is hovering around$750,000. The REC Center subsidy is approximately fifty percent of the general fund transfer to the parks and recreation department. Administrator Olson stated that we are at the same transfer amount that we were at in 2005-2006 for parks and recreation operations.He said that the city has increased fees, offered more classes, focused on running classes that make more money, and tried to introduce new revenue opportunities to chip away at the transfer amount. Mayor Golinski commented that when the REC Center first came to the City Council,he supported it because it was presented as being budget neutral. He thought projecting it as budget neutral was overly optimistic the first year or so,but he thought that by now,it would be budget neutral. He asked Superintendent Evans if he thought that the REC Center would be budget neutral in the next two—three years. Superintendent Evans said that he didn't want to make any promises to the City Council;he can only show what he has done in the past six—seven months. Mr.Evans stated that the figures show that in the past six months,the REC center has started moving in the right direction;however,there may be circumstances that are not under his control. He pointed out that there are not any funds budgeted for unexpected major expenses. Alderman Colosimo commented that when this was originally proposed the City Council was asked to take a big leap of faith. He said that on the initial face of the contract,the city has lost a lot of money that no one anticipated that the city was going to lose. He said that he is not opposed to keeping the REC Center; however,he feels that they are being asked to take another leap of faith. If the City Council decides wrong,then the city will be stuck with the REC Center for another seven years at an ever increasing monthly rent fee. Alderman Colosimo stated that if he has to err,he would rather err on the side of caution. Park Board President Koch stated that he had wanted to meet with the City Council to get their thoughts on the renewal of the REC Center lease. He wondered if the council wanted to go back to the Walkers and try to renegotiate the lease agreement. If so,then the city would need a new appraisal on the REC Center. Alderman Colosimo said that he is open to spending money on an appraisal. Alderman Funkhouser asked if the lease is renewed for another term, are there any projections that the city would have enough memberships and/or classes to sustain the monthly rent payments, especially as the monthly rent will increase over the term of the lease. Superintendent Evans said that if every month was like the current one,then they would be able to sustain a lot,but he can't make any promises. Alderman Colosimo stated that the problem he has is that they are being asked to look at a six month window of figures and then make a projection for the next seven years of a lease. They are being asked to ignore the prior three years of figures. Alderman Spears said that she has heard complaints from residents because of the minimal cost difference between resident fees versus non-resident fees. Alderman Spears said that there is only an eight dollar difference in cost between the resident fee and the non-resident fee. The residents she had spoken to wondered why they were only paying eight dollars less than non-residents, when a portion of the residents' tax money was going to the recreation department. Alderman Spears asked what the current cost structure was. Ms.Hopkins stated that the basic membership was forty dollars for residents and forty-eight dollars for non-residents per month. If a spouse was added,the cost was an additional thirty dollars for residents and thirty-five for non-residents. Administrator Olson said that this was something that could be looked at. Ms. Hopkins said that she thinks that the reason that the fees were set close together was to encourage non-residents to use the REC Center. Ms.Horaz said that the real issue being discussed is a money issue. She feels that they need to look at the maintenance and really figure out all of the costs coming down the road. In her opinion,the whole idea of the REC Center is to have a place for recreation for families and the community. Alderman Spears stated that she would like an estimate on the pool repairs,the HVAC, and the equipment. The Minutes of the Special Meeting of the City Council—June 14,2011—page 3 Alderman Colosimo thought a small subcommittee should be formed to see if renegotiating can occur. Mayor Golinski pointed out that even with moving forward with renegotiating,he did not see how this would work with any lease agreement that held the city responsible for the property taxes. He asked the City Council if they were open to looking at a lease purchase or an outright purchase so that the property taxes could be removed from the equation. Mayor Golinski said that he didn't see the point of signing another five year lease and paying$60,000 per year in property taxes. In his opinion,he feels that the city should get an appraisal and then sit down with the Walkers and try to renegotiate. A purchase would remove the property taxes and the payments could be more affordable. Alderman Spears questioned where the money would come from to purchase the building. Attorney Orr said that we might be able to renegotiate it as an installment purchase so that the city could take title right away so that the city would not have the expense of the property taxes. Ms. Coveny thought someone should look into what other buildings would be available before negotiations begin with the Walkers. There was a consensus that an appraisal would need to be done before the city started renegotiating. Mayor Golinski said that he wanted to hear more about the recreation department's alternative plans if the city decides not to keep the REC Center. Superintendent Evans said that the Park Board would need to start discussing what direction they want the department to take. Mayor Golinski said that he feels that everyone sees the value in the REC Center,but not on the current path that it's on. He said that the REC Center discussion will be ongoing. ADJOURNMENT Mayor Golinski entertained a motion to adjourn the meeting. So moved by Alderman Colosimo; seconded by Alderman Munns. Adjournment of the meeting was unanimously approved by a viva voce vote. Meeting adjourned at 6:37 p.m. Minutes submitted by: i d�_ Lisa Pickering, Deputy City Clerk, City of Yorkville,Illinois I I� i i SPECIAL CITY COUNCIL MEETING June 14, 2011 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: �aJ2a WhA 0 L) coy Dye. L&2�1- Cc?-1 15?�xxg efc Aio,� Wob Fte Q/r,c/Cso COP �Va,(7 0 40y) L&)�5ey \jLN,,o(�\�j QT fbiFf::� eo L-i Cr SIGNIN SPECIAL CITY COUNCIL MEETING June 14, 2011 PLEASE PRINT NAME: SUBDIVISION OR BUSINESS: -� Y ►�(��� D 1(i VI 5 COY + Rkp rt scxrli'n 4 ron W0. 4A^ I i i SIGNIN