Willie L. Brown, Jr., Mayor

Transcription

1 Willie L. Brown, Jr., Mayor RECREATION AND PARK COMMISSION M I N U T E S Monday, February 10, :30 p.m. The Special Meeting of the Recreation and Park Commission was called to order on Monday, February 10, 2003 at 1:34 p.m. by Commission President John Murray. ROLL CALL Present: John Murray Billy Getty Gloria Bonilla Gordon Chin Jim Lazarus Larry Martin Rebecca Prozan RECREATION AND PARK DEPARTMENT - APPROVAL OF FY BUDGET General Manager Goldstein spoke about: 1) the budget instructions from the Mayor s office, 2) budget targets, 3) the discussions at public meetings, 4) the $8.6 million cuts, 5) increasing revenue and 6) reducing staff. Michael Frank presented this item to the Commission for approval of the Department s Budget. He spoke about: 1) total City Budget for FY , 2) revenues and expenditures for FY , 3) operating expenditures for FY , 4) budget breakdown by program for FY , 5) $10.2 million budget problem in FY , 6) balancing FY budget, 7) FY general fund reductions, 8) FY and FY operation budget comparison and 9) examples of exiting budget reduction impacts. He also spoke about: 1) the historic actual staff worked since 1994 and 2) proposed budget for FY President John Murray asked staff to explain why aquatics was excluded from the chart regarding recreation staff actual FTE s work since General Manager Goldstein explained that the chart showed pure recreation titles opposed to titles existing at the pools. President John Murray asked Michael Frank to comment for the benefit of the audience on the number of estimates the City s budget deficit has changed over time which has been hard for the Department to changing the budget with the City s overall deficit. Michael Frank explained that the estimate for the City budget deficit has changed at least ten times over time from $90 million up to $350 million and the target amount the Department was required reduce increased from $5.8 million up to 8.6 million just as of a few weeks ago. General Manager Goldstein gave a presentation on FY proposed budget options. She spoke about: 1) probability for revenue and expenditure options, 2) savings to the general fund, 3) anticipated layoffs, 4) public budget meetings and 5) core/non-core exercises. President John Murray asked General Manager Goldstein to explain why thethe $3.2 million President John Murray asked General Manager Goldstein as part of the probability options to explain: 1) the work the kids do in Workreaction, 2) the value of the Geneva lot and 3) if the Department considered

2 other uses for the Geneva lot. General Manager Goldstein explained that for the summer the kids are junior camp counselors and the rest of the year they support the recreational programs and administrative staff. Budget Discussion for Fiscal Year Background: This packet includes materials for the Commission s discussion of the budget on February 10 th. It includes the presentation to the public during the three Public Budget Meetings held during the first week of February. It also includes a discussion paper on the Open Space Fund, the Budget instructions from the Mayor s Office, and input received at the public meetings. Fiscal Year 2003/2004 Budget Problems The Mayor s Budget Office projects a budget shortfall of $350 million in FY Tax revenue decreases, led by sales and hotel tax losses, has continued and is expected to remain weak for the near future. As part of the Mayor s policy instructions on the budget issued in December, and reissued in January, departments have been asked to reduce General Fund spending by 6%. Departments also need to absorb known cost increases for FY of approximately 4%. Lastly, City departments are being asked to develop an additional 10% reduction contingency plan. In addition to the above, the Recreation and Park Department needs to address the one-time gift and Open Space Fund monies used in FY to balance the budget. These amount to approximately an additional $1.8 million. The total reduction target for FY is $8.6 million with the 10% contingency. The following chart summarizes the targets needed to balance the Department s budget in FY % Reduction $2.2M 4% Cost absorption $1.2 Positions funded with Gift Funds in FY $.9 Positions moved to Open Space Fund in FY $.9 10% Contingency $3.4 TOTAL $8.6M Use of Open Space Fund Background: Open Space Fund History The Park and Open Space Program first enacted in 1974 under Proposition J, set aside a portion of the City s property tax revenue for a period of 30 years. The purpose of the program was to enhance the ability of the City to purchase open space, acquire property for recreation facilities, and develop and maintain those facilities. The original Fund was expanded in 1988 under Proposition E to include funding for children s services such as the after school program, maintenance of existing parks and open spaces, other recreational programs and program administration. With the funding authority established under Proposition J and amended by Proposition E nearing its end, the San Francisco voters approved Proposition C in March Proposition C extended Proposition J s property tax of two and one-half cents ($0.025) of each $100 assessed valuation for another 30 years to fund park and recreation facilities. The language included under Proposition C, however, was changed to simplify how funding was allocated and administered for projects and programs. Allocation of the Open Space Fund Under Proposition E

3 Proposition E mandated an allocation formula for the expenditure of funds from the Open Space Fund. The allocation formula for the fund is outlined below: Up to 40% of the total fund was to be allocated for maintenance of properties acquired under Proposition J. Of the remaining funding: 20% was to be allocated for the operation of an after school program At least 40% was to be allocated for acquisition and development. At least 15% was to be allocated for renovation Up to 25% was to be allocated for administration, programs and maintenance of new open space properties and renovated open space facilities. The chart below shows an example of the distribution of Open Space Fund expenditures under Proposition E. It uses fiscal year as an example and includes budgeted dollars and the percent distribution in the fund. Category of Fund Proposition E Formula Allocated Allocation Percents Percent of Total Fund Maintenance of properties acquired under Proposition J Up to 40% of total fund $6,500,000 33% 33% After School Program 20% of remaining 2,680, Acquisition & Development Renovation Administration/Maintenance At Least 40% of remaining Al Least 15% of remaining Up to 25% of remaining 5,707, ,620, ,392, Total $19,900, % The distribution between operating and capital in FY is 58% operating and 42% capital. Allocation of the Open Space Fund Under Proposition C The allocation methodology passed by the voters under Proposition C is simpler and more general than under previous initiatives. The legislation requires the following with regard to its use: 3% is set aside as an undesignated contingency reserve 5% must be allocated for property acquisition unless other City funds are used to purchase property for the Recreation and Park Department Allocations, from any departmental source, for after-school recreation programs, urban forestry, community gardens, volunteer programs, and a significant natural areas management program in the amounts allocated for those programs from the Open Space Fund in FY There are a number of policy issues which need to be determined by the Commission based on Proposition C. Some of these policy issues will be discussed with the Park and Recreation Open Space Advisory Committee (PROSAC) on February 6. Others will be brought forward at a future date. Some examples of the policy issues include: Proposition C leaves a lot of flexibility to the Recreation and Park Commission in determining the distribution between operating and capital. The Commission could create a formula similar to what existed under Proposition E. The Commission could also determine a more general split between

4 operations and capital. Lastly, the Commission could decide to leave the amount to be allocated to particular areas as part of the annual budget process. Proposition C allocates a 3% undesignated contingency to be set aside. There are no guidelines for use of this contingency once allocated. Proposition C sets aside for property acquisition an allocation of not less than 5% of the monies to be deposited in the Fund during the upcoming fiscal year. Tax revenues to be deposited in the Open Space Fund are not known prior to their collection. What is the methodology to determine the appropriate amount to be set aside? In addition, guidelines need to be established regarding the accounting for acquired properties. 7-Year Forecast The Open Space Fund generates its revenues through Property Tax which has remained strong throughout this recession. Property Tax grew 76% during the last 6 years. Such growth has allowed the level of funding for capital projects and operating expenses to grow and a healthy fund balance to accumulate. There is $3.9 million in fund balance available for appropriation for either operating or capital spending. Significantly more funding is expected to be spent on Capital than in past years. This is possible due to the overall growth of the fund. Use of Open Space Fund Balance for 17 Positions In order to address the budget deficit for fiscal year , the adopted budget included the use of Open Space Fund balance to fund 17 positions previously funded in the General Fund. There was general agreement on the Commission and Staff s part that this action was one time in nature to free up funding for additional capital projects at a future point in time. At that time, most economists believed the nation was coming out of the recession. Few could have foreseen the state of the City s budget deficit. Given the severe budget situation, staff has included in its budget proposal the use of $900,000 of the $3.9 million fund balance to support 17 positions for an additional year. On motion made by Commissioner Lazarus and duly seconded the following resolution was adopted: RES. NO RESOLVED, That this Commission does approve the San Francisco Recreation and Park Department s budget for FY SPECIAL ORDER OF BUSINESS 4:00 P.M. HARDING PARK Jaci Fong presented this item to the Commission to authorize Staff to enter into exclusive negotiations with the selected management company. Background/Description: On October 17, 2002, the Recreation and Parks Commission (the Commission ) authorized the Recreation and Parks Department (the Department ) to issue a request for qualifications ( RFQ ) to identify a pool of potentially qualified respondents to operate and manage the Harding Park and Fleming golf course complex on the terms and conditions described in the RFQ and the Request for Proposals ( RFP ) that followed (the Project ). On November 21, 2002, the Commission confirmed the recommendations of a review panel identifying the six candidates qualified to respond to the RFP. On the same date, the Commission authorized the General Manager to issue the RFP to those candidates.

5 In December, the General Manager appointed a Selection Panel (the Panel ) to review the proposals and provide the Commission with a recommendation for a management company to manage and operate the Harding Park Golf Complex. The Panel was comprised of the following individuals: Leamons Abrams, Director of Mayor s Office of Economic Development Ed Lee, Director of Department of Public Works Susan Lowenberg, Citizen and form President of the Planning Commission Marc McDonald, Director of Real Estate Louise Renne, General Counsel, San Francisco Unified School District, former City Attorney Responses to the RFP were due and received by December 27, 2002 from four firms: Aerostar Development ( Aerostar ), Celtic Golf Management ( Celtic ), Colbert Golf ( Colbert ) and Kemper Sports Management ( Kemper ). On January 14, 2003 oral interviews were held by the Selection Panel with each of the respondents, as contemplated by the RFP. The Selection Panel reviewed each of the four responses to the RFP. Based on the proposals themselves, responses to the oral interviews and the conclusions of an economic analysis of each of the four proposals completed by Economics Research Associates (the ERA Report ), members of the Selection Panel evaluated the proposals under the weighted selection criteria set forth in the RFP. Summary of Recommendation of Selection Panel: The RFP set forth four categories of selection criteria as follows: Experience and Qualifications, including operational experience and financial capability 30 points Management Plan, including the quality value and nature of respondent s plans 30 points Financial terms, including base management fee and any incentive compensation, total projected revenues to the City, and proposed overall budget 30 points Improvements tot he Premises 10 points Of the four candidates, based on combined scores, Kemper was ranked first in every category with total points, significantly higher than the second ranked candidate at points. For the Selection Panel the most distinguishing factors in Kemper s favor were their demonstrated success and extensive experience in the industry and in marketing; their plans for working with and training City employees; the quality of their marketing plan; and their financial proposal. Kemper provided a concise proposal with plans and initiatives that could be practically administered. Highlights I. Experience: In the category of experience, Kemper received a combined score of 135 points out of a possible 150 points. Kemper has extensive experience in managing and hosting major tournaments including the Kemper Open, the Women s Kemper Open and the Ameritech/SBC Senior Open. Kemper has demonstrated success in operating youth oriented programs and developed the Chicago Chapter of the First Tee organization. They have extensive experience in all phases of marketing including public relations, brand development, advertising, website and database marketing. Kemper operates numerous municipal courses in Chicago, New Orleans, Yorba Linda, CA, and Palm Desert. II. Quality of training and plan to work with City employees: The Selection Panel felt that one of the key factors to the success of the project is the relationship between the management company and our staff at the courses. They felt that the ability to provide training and establish a good working relationship with our workforce is critical. Kemper offered extensive experience in working with municipalities (including similar situations where City employees continue to maintain the courses),

6 experienced personnel with technical expertise, and a hands-on training and problem solving approach. As part of their management plan, Kemper outlined specific areas where they will work with and assist in training city employees, ranging from scheduling and course detail work to customer etiquette. III. Quality and viability of marketing plan: Kemper outlined its plans to start by first conducting its own market analysis of San Francisco and the surrounding Bay Area market to identify its strengths, weaknesses, opportunities and threats. Kemper will then re-brand Harding Park. Kemper s proposal included a concise description of how they will utilize public relations, advertising and other marketing tools such as on-line tee time reservations, cross-marketing, collateral and database marketing to achieve the City s goals as outlined in the RFP. IV. Financial Proposal: Kemper proposed a base management fee of $16,000 per month or $192,000 per year plus incentives of five percent of total gross revenue exceeding $6 million annually. Kemper received 115 points out of a possible 150 points for their proposed financial terms. The next highest ranked bidder received 93 points in this category. Final scores were: 1. Kemper Colbert Celtic Aerostar 195 On motion made by Commissioner Lazarus and duly seconded the following resolution was adopted: RES. NO RESOLVED, That this Commission does affirm the recommendation of the Selection Panel for a management company to operate and manage the Harding Park Golf Complex, and to authorize Staff to enter into exclusive negotiations with the selected management company. ADJOURNMENT The Regular Meeting of the Recreation and Park Commission was adjourned at 4:30 p.m. Respectfully submitted, Sharie Canja for Margaret McArthur Commission Liaison