5.4. SR 10-28-2002MEMORANDUM
Item 5.4.
TO:
FROM:
DATE:
SUBJECT:
Mayor and City Council
Pat Klaers, City Admin~t~o~
October 28, 2002 ~
Boys & Girls Club Issues
The city has been a big supporter of the Boys and Girls Club. This support from the City
Council includes having the club located in Lions Park, incurring a sizeable legal bill in
development of thc ground lease and other documents, and authorizing the city street crew
(and equipment) to assist in the preparation of the building construction site. The city
continues to have a strong interest in seeing that the Boys and Girls Club is successful.
The Boys and Girls Club ground lease states that the city must agree to the club taking on any
more debt which is tied to the building. In order to obtain an influx of cash for operating
expenses, the Boys and Girls Club desires to add to their current building debt. Due to a
variety of circumstances, including lower than anticipated local contributions and the turnover
of the Executive Director position, the club has fallen behind financially. The board of
directors for the Boys and Girls Club sees this as a short-term, temporary situation.
Representatives from the Boys and Girls Club will be at this City Council meeting to discuss
the request for the city to "sign off" on the club incurring more building debt.
There is one important point to bring to the attention of the City Council regarding this
request. This point is that under worse case scenario, if the Boys and Girls Club does not
make it financially and has to dissolve for whatever reasons, then the city is the likely buyer of
the building which includes assuming the building debt. Accordingly, agreeing to the club
taking on more debt does have a possibility - even if it is a small possibility - of costing the city
some money at sometime in the future. The current debt on the building is about $72,000.
A second item to discuss with the City Council is the possibility of the city leasing gym space
at the Boys and Girls Club. City Recreation is always looking for opportunities and building
space to provide programs and we have recently talked with the Boys and Girls Club about
leasing gymnasium space for running City Recreation programs. If this lease of the gym space
were to take place, all of the programs would be new and most of the programs would be of a
"break even" variety excluding the lease payment (i.e. program registration revenues would
cover payments to instructors). In this regard, any expenses that the city has for renting or
leasing space would be a City Recreation budget addition for 2003 with no revenues to offset
this leasing expenditure. Nonetheless, utilization of this gymnasium would be a good
opportunity for the city to offer more programs.
The suggested lease amount for the gymnasium space is $15,000 per year with a minimum of a
three-year commitment. The city would have access to the gymnasium all 52 weekends of the
year and the city would also have use of the gymnasium on school days before 2 p.m. The city
would not have use of the gymnasium during the weekdays during the summer. Based on
$15,000 per year, the cost to the city for use of the gymnasium to run programs would be
under $300 per week. The City Recreation Manager Michele Bergh has advised me that having
this space available on weekends year round (and for weekdays during the school year in the
mornings) would be a great addition to the City Recreation program offerings.
The City Council needs to consider this recreation expenditure in light of the current 2003
budget shortage that we are experiencing and which we could be experiencing for the next
several years. As with most budget issues, the decision to lease space at the Boys and Girls
Club relates to Council priorities.
s:~ council\pat\boys&girls.doc