Consultant says city-run YMCA would be costly, encourages future capital improvements
Having the city take over operations at the Sherwood YMCA would be a more costly endeavor than other options, according to a consultant hired by the city.
Meanwhile, the city could get quotes on how much it would cost to turn over the daily running of the recreation center to a local parks district or private company.
But the city would need to do so quickly.
Those were among the suggestions of a feasibility study conducted by a Colorado recreation facility consultant presented to the Sherwood City Council during a work session Tuesday.
Last week, Ballard King & Associates released a $31,000 study, which looked at possible management and operations options for the Sherwood Family YMCA. The facility is owned by the city but has been operated by the YMCA of Columbia-Willamette since 1998 through a 20-year contract. That contract expires in 2018 as does the $129,000 lease payment.
"So what happens going forward will be pretty critical," said Ken Ballard, a partner with the consulting firm. "The city's financial obligation on that facility has been pretty minimal."
But regardless of who operates the YMCA, making capital improvements or renovations should be in the mix, the consultant urged.
Ballard said while the city could see revenues of $2.34 million in its first year if it ran the facility, it would have an operational shortfall of almost $350,000, noting that most public recreational facilities are in the same boat. Much of that cost is tied to higher personnel costs related to using city personnel including costs associated with the Public Employees Retirement System, commonly referred to as PERS.
"Most public facilities, especially in the Northwest, operate at a deficit," said Ballard.
Still, he said there was a significant youth and family market that could be tapped into and increased to generate more revenue.
Currently, Ballard said the greatest single source of revenue (71 percent) generated by the YMCA comes from memberships, followed by program fees. At the moment, 8,190 individuals are YMCA members.
He pointed out that the YMCA is strong when it comes to marketing efforts (and provides $300,000 in scholarship money for those who can't afford to join), also noting that YMCAs nationally "are known for being (run) lean and mean."
Ballard said if neither the city nor the YMCA operate the recreational facility, the city could seek the services of a special parks district or a private, for-profit management company. If that's what the city wants to pursue, Ballard said a request for proposal should be sent out this spring.
While the current YMCA building "is in usable condition for its age," Ballard suggested improvements could be made including adding weight room and cardio space as well as installing a 25-yard pool and updating locker rooms.
For the future, Ballard suggested signing a shorter contract than the one currently in effect between the city and YMCA.
"We think any new operating agreement should reduce the term," he said, noting that a time frame of between 10 to 15 years is more practical.
In addition, Ballard's presentation noted that there are ambiguous portions of the current contract dealing with capital improvements, maintenance and finances, which all need to be clarified. The consultant said there also needs to be more city representation (city council members or city staff) on the YMCA's board of directors and there should to be an "exit" clause for the parties involved in order to terminate any further contract.
Since the presentation occurred during a work session, no formal decisions or votes on the issue were taken.
Following the meeting, Scott Nelson, a YMCA board member, said the feasibility study confirms that the city has been getting a "really good deal for many years."
He pointed out that the YMCA is also extremely generous with its financial aid for Sherwood residents as well as hosted a teen center and taking care of the homeless.
"The consulting firm said that if Sherwood were to try to operate a public center with comparable facilities and services, it would have to spend at least $350,000 a year in taxpayer dollars," said Nelson. "And that's not including city staff time for managing the center. Add those costs in, and the total rises to more than $1 million a year."
He went on to point out that a for-profit operator would want to make money, likely resulting in fewer programs and a loss of financial aid.
"After reviewing the findings of this report, I hope the city council asks staff to sit down to begin negotiating a new contract with the YMCA," said Nelson. "The old one is about to expire, and it's time for a new one."