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HomeMy WebLinkAboutMINUTES - 09211999 - SD2 TO: BOARD OF SUPERVISORS � - Contra Costat FROM: Leslie T. Knight, Director of Human Resources :q County DATE: September 21, 1999 SUBJECT: Consider Accepting the Report from the Director of Human Resources regarding the termination of lease for the Contra Costa Club located at 627 Ferry Street, Martinez SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: CONSIDER accepting the report from the Director of Human Resources regarding the termination of the lease for the Contra Costa Club located at 627 Ferry Street in Martinez. BACKGROUND: On June 24, 1997 the Internal Operations Committee submitted a report to the Board of Supervisors in response to report No. 9704 of the 1996-1997 Contra Costa Grand Jury. The Board of Supervisors directed the Human Resources Department to prepare an analysis before the current lease expires with a recommendation to the Board as to renewing the lease. As the lease for the building is scheduled to expire on February 28, 2000, the Human Resources Department has prepared the attached report outlining the historical background of the Contra Costa Club and the Department's recommendations for the lease renewal. RECOMMENDATIONS TO THE BOARD OF SUPERVISORS: 1. The Human Resources Department has carefully reviewed the financial situation of the Contra Costa Club and has determined that it is not fiscally prudent to renew the lease when it expires. This decision is based on the limited funding resources available to improve the facilities and to continue operating the Club at its current level combined with our limited staffing resources. H:BO CCC CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON September 21 , 1999 APPB0VMA&RII+CI0QVIMKXBED OTHER X IT IS BY THE BOARD ORDERED that consideration of the above matter is CONTINUED to October 12, 1999. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND UNANIMOUS(ABSENT 22ap e. } CORRECTED COPY OF AN ACTION TAKEN AND AYES: NOES: ENTERED ON THE MINUTES OF THE BOARD OF ABSENT: ABSTAIN: SUPERVISORS ON THE DATE SHOWN. ATTESTED September 21 , 1999 Orig.Dept:Human Resources Department (5-1754) PHIL BATCHELOR,CLERK OF THE BOARD OF cc: County Administrator,Capital Facilities Division UPERVISORS AND COUNTY ADMINISTRATOR General Services,Lease Management Division Auditor-Controller BY ,DEPUTY M382 (10/88) l� -2- 2. The Human Resources Department will make the necessary arrangements to liquidate the equipment and furnishings of the Club and utilize those funds to help offset the negative fund balance. Additional funds resulting from the release of the reserves for the depreciation will also be utilized to increase the fund balance. Any monies owed to Club members who have prepaid their membership dues will also need to be appropriately refunded. We are also currently in discussions with the County Administrator's Office to determine how to offset the remainder of the debt. 3. In the event the Health Services Department is interested in utilizing the Club's facilities, we will assist them in the transition of the operations and make the necessary arrangements to liquidate and/or sell to them any requested equipment and furnishings. CONTRA COSTA CLUB S UMMA R Y REPOR T TO THE BOARD OF SUPERVISORS September 21, 1999 Submitted by: Leslie T. Knight Director of Human Resources Contra Costa Club Summary Report September 21, 1999 HISTORICAL BACKGROUND On November 25, 1987 the Contra Costa County Board of Supervisors approved the funding of a County Wellness/Conference Center located at 627 Ferry Street in Martinez, an existing, vacant, non-County owned building. The Board also authorized the Lease Management Division of the General Services Department to negotiate the costs of remodeling the property (refer to the attached Board Order). After conducting numerous feasibility studies and information gathering to analyze the type and scope of the exercise facility, the Lease Management Division negotiated a lease for the building. On November 15, 1989, the Board of Supervisors authorized the Director of the General Services Department to execute the lease for the building (refer to attached Board Order). As funding for the required building renovations was not available, an amortization of the improvement costs financed by the owner of the building was factored into the lease over a ten year period as a monthly lease improvement cost in addition to the monthly lease payments. On July 2, 1990, the Employee Wellness Program, a division of the Contra Costa County Human Resources Department, began operations of the Contra Costa Club, a health and fitness facility designed for County employees to reach the following objectives: • To expand the existing Employee Wellness Program so that it could be operated in conjunction with a comprehensive, full- service fitness and wellness center; • To demonstrate to the employees the County's support and interest in their health and well being; and • To obtain the benefits that a health and wellness facility provides to an employer such as increased employee productivity, lower health care costs, decreased absenteeism and increased employee morale. Page 1 Contra Costa Club Summary Report September 21, 1999 STATUS OF THE CURRENT MEMBERSHIP The Contra Costa Club has a current membership of approximately 450 members which is comprised of 65% County employees (including spouses, dependents and retirees) and 35% non-County members (including local residents and employees of local businesses and municipalities). Both County and non-County members pay a monthly fee to belong to the Club, with non-County members paying a higher fee than County employee. The current membership fees range from $35 per month for Single County memberships and $40 per month for Single non- County memberships with additional fees for Dual and Family memberships and for towel, locker and laundry service. FINANCIAL EVALUATION The Contra Costa Club began operations with a negative fund balance. This was the result of the limited funding resources available to pay for the start up costs in order to purchase the necessary exercise equipment and supplies to begin operations. The Club has continued with this deficit balance due to the following factors: • Lack of start up funding to purchase the exercise and fitness equipment and other large equipment costs resulted in a lease purchase arrangement over a three year period in order to purchase those items; • The poor economy of the early 1990's followed by the County layoffs of employees in 1992 affected the base membership; • The limitations placed on the location and size of the facility; • Annual increases in the lease payments over the 10 year term of the lease; Page 2 Contra Costa Club Summary Report September 21, 1999 • Major repairs to the lockerooms and other costs associated with necessary equipment and building maintenance replacement and repairs; • The movement of large groups of County employees out of the downtown Martinez area; and, • The insurgence of fitness facilities opening up in Central Contra Costa County over the last several years. These facilities offer newer equipment, larger facilities, and the latest trend in fitness programming. The Club has operated at an average yearly net loss of approximately $45,000 over the last nine (9) fiscal years with a current debt balance of approximately $470,000. To put these figures in perspective, the lease improvement costs have averaged approximately $48,000 annually, representing a current total improvement cost of over $480,000 for the ten (10) year period. For further comprehension of the scope of the expenditures required, the building occupancy costs comprise approximately 85% of the average yearly expenditures for operating the facility and include such expenses as the lease payment and improvement costs, building maintenance costs, utilities, insurance and property taxes costs, and janitorial services. The staffing costs and the service and supplies costs required to operate the facility comprise the other 15% of the yearly expenditures. In addition, there is approximately $57,600 in reserve for depreciation for the Club's exercise and other equipment. Should the Club's equipment be liquidated, this depreciation reserve would be released and that reserve would be utilized to increase the Club's fund balance. COA MITMEA T TO THE BOARD OF,SUPER VISORS On June 24, 1997 the Internal Operations Committee submitted a report to the Board of Supervisors in response to report No. 9704 of the 1996-1997 Grand Jury. At that meeting, representatives from the Human Resources Department, the County Administrator's Office, and the General Services Department answered Page 3 Contra Costa Club Summary Report September 21, 1999 questions regarding the recommendations of the Internal Operation Committee and received the directive from the Board of Supervisors to do the following: 1. Attempt to identify parties interested in sub-leasing the facility for a health club; and, 2. Prepare an analysis at least 12 months before the current lease expires with a recommendation to the Board as to renewing the lease. The General Services Department conducted several inquires to locate potential interested parties and to determine the costs associated with converting the current space occupied by the Club for other purposes to be used by the County. Their findings indicated that the most cost effective approach would be to continue the current operations of the Club until the lease expired as the Human Resources Department's obligation to pay off the remainder of the improvement costs still remained. CURREAT STATUS OF THE LEASE The existing lease for the Contra Costa Club is scheduled to expire on February 28, 2000. At that point, the Human Resources Department will have fulfilled its obligation to pay for the initial improvement costs. However, the ongoing debt of operating the facility continues to increase. The County's Capital Facilities Manger and the Lease Manager have conducted several preliminary lease renewal discussions with the owner of the building to determine potential terms of a new lease. At these meetings, the owner of the building has indicated his openness and willingness to work with the County to renegotiate a new lease arrangement resulting in a lower monthly lease payment as the improvement costs will no longer be an issue. Meetings have also taken place with key representatives from the Human Resources Department, the County Administrator's Office, the Auditor-Controller's Office, and Lease Management to discuss various options and recommendations for deciding the future of the Contra Costa Club. In addition, the Health Services Department has indicated an interest in utilizing the Club's physical facility as a Physical Therapy/Rehabilitation Center. Page 4 • Contra Costa Club Summary Report September 21, 1999 RECOMMENDATIONS OF THE HUMANRESOURCES DEPARTMENT 1. The Human Resources Department has carefully reviewed the financial situation of the Contra Costa Club and has determined that it is not fiscally prudent to renew the lease when it expires. This decision is based on the limited funding resources available to improve the facilities and to continue operating the Club at its current level combined with our limited stafYing resources. 2. The Human Resources Department will make the necessary arrangements to liquidate the equipment and furnishings of the Club and utilize those funds to help offset the negative fund balance. Additional funds resulting from the release of the reserves for the depreciation will also be utilized to increase the fund balance. Any monies owed to Club members who have prepaid their membership dues will also need to be appropriately refunded. We are also currently in discussions with the County Administrator's Office to determine how to offset the remainder of the debt. 3. In the event the Health Services Department is interested in utilizing the Club's facilities, we will assist them in the transition of the operations and make the necessary arrangements to liquidate and/or sell to them the requested equipment and furnishings. Page 5 To BOARD OF SUPERVISORS 0.'y FROM: Harry D. Cisterman, Director of Personnel Contra Costa DATE: November 15, 1989 Cxyjnty SUBJECT: Contra Costa Club SPECIFIC REQUEST(S) OR RECOMMENDATION(S) BACKGROUND AND JUSTIFICATION Recommendations- 1. APPROVE the report and the recommendations of the Director of Personnel to establish a self-supporting fitness facility in Martinez, named the Contra Costa Club, for the use of County employees to help improve their health and well-being. 2. AUTHORIZE the Director of General Services to execute a lease between the County and Earl Dunivan, et al., for the lease of the property at 627 Ferry Street, Martinez for a lease term of 10 years with a 5-year cancellation option available to the County, lease to begin after completion of building renovations currently anticipated around March 1, 1990. 3. AUTHORIZE the Director of Personnel to establish the membership fees and dues to be charged to County employee and non-employee fitness club members and to begin accepting applications and fees from pre-enrolled members prior to the opening of the Club. 4. AUTHORIZE the Auditor-Controller to establish an Enterprise Fund for the operations of the Contra Costa Club. 5. APPROPRIATE funding and revenues to offset the appropriations on a 100 percpnt basis for Fiscal Year 1989-1990 in the Contra Costa Club Enterprise Fund. 6. AUTHORIZE the Auditor-Controller to make a loan of $11,000 from the General Fund to the Contra Costa Club Enterprise Fund, with no interest, to be repaid by the end of the 1989 - 1990 Fiscal Year. 7. AUTHORIZE the Auditor-Controller to allow County employees to utilize a payroll deduction to pay for the regular monthly Club membership dues. CONTINUED ON ATTACHMENTS--il-YES SIGNATURE: -RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE -APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON December- 5, 1989 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS X UNANIMOUS (ABSENT I HEREBY CERTIFY THAT THIS IS A TRUE AYES., NOES: AND CORRECT COPY OF AN ACTION TAKEN ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CC:0_un t y Administrator ATTESTED Dec-ember 5. -1989 Personnel Phil Batchelor,&A 01 the losid of Auditor-Controller S.Y.P9-ri-Ors and COURty AdminWjaw General Services fiscal Impact:_ The Director of Personnel's report on the Contra Costa Club, demonstrates that the Contra Costa Club will be funded by membership fees and dues from County employee memberships and non-employee memberships. All costs associated with the Club will be 100 percent offset by revenue collected. In order to finance the start-up costs for the Club, the enterprise fund will need a "cash" loan from the General Fund of $11,000 to be paid back from Club revenue by June 30, 1990. Additionally, the Board previously allocated $23,000 and $70,000 in refunds from Aetna Insurance Company to be used for capital improvements on this project. Anticipated monthly operating expenses for the Club are $16,500 per month which results in an annual operating budget in excess of $200,000, all offset by revenue received from Club members. To cover the Fiscal Year 1989-1990 budget for the remainder of the year, including both initial start-up costs and operating expenses, an appropriation adjustment has been submitted for $81,872 for Board approval. An offsetting revenue adjustment has also been submitted for Board approval. Due to increased lease and insurance costs in the next fiscal year, monthly operating expenses will rise to approximately $18,000 per month, resulting in an annual operating budget in the second fiscal year of almost $215,000 all of which will be paid by Club member fees and dues. Background: The concept of establishing a health and fitness facility for the County employees was developed to reach the following objectives: to expand the physical fitness programs and services currently being offered by the Employee Wellness Program; to demonstrate to the employees the County's support and interest in their health and well-being; to increase employee morale; to obtain increased employee productivity and lower health care and insurance costs through on and off-the-job injuries, fewer Workers' Compensation claims, decreased absenteeism, and lower turnover rates. In order to determine the potential membership market, Club Interest Questionnaires were distributed to County employees working in the Martinez area and employees of selected local businesses and other governmental agencies. Over 450 individuals signed the Club Interest Questionnaire form stating that they were very interested in joining the Club. Of that 450, 127 County employees and 55 non-County employees stated that they would join the Club for a 5-year personal commitment under the Charter Membership Program. The Contra Costa Club has been designed to offer a variety of fitness testings and health screening programs, wellness health education seminars and classes, aerobic exercise classes, and a complete line of circuit training exercise equipment, cardiovascular exercise equipment and free weight exercise equipment to appeal to all levels of exercisers. The Contra Costa Club will be open 15 hours a day, which makes the facility available to all employees, including shift workers, on their off hours. Employee Wellness Program staff will manage the Club; trained, professional staff from the Contra Costa Community College District will act as Athletic Trainers for the Club at no cost to the County. Student interns from local community colleges and/or universities will also assist in staffing the Club. 'ro, BOARD OF SUPERVISORS FkCM: Harry D. Cisterman, Director of Personnel Contra DATE: November 25, 198.7 ' Costa. W DEC 14 'P 3:59 County SUBJECT: Wellness/Conference Center SPECIFIC REQUEST S) OR RECOMMENDATION(S) & BACKGROUND AM JUSTIFICATION Recommendation: Approve funding for a County Wellness/Conference Center located at 627 Ferry Street in Martinez, California. Authorize the Lease Management Division of the General Services._Department to negotiate the costs of remodeling said property and a lease agreement. Fiscal Impact: The remodeling costs to. make the 'building suitable for the intended' use will- be shared by the owner and the County. The County contribution required will be $40,000; $23,000 of which can be funded from a return of reserves from our Aetna Life Insurance program. An additional $17,000 is necessary to maintain the monthly lease costs at an affordable level. As you recall, your Board had approved $30,000 for installation of shower facilities in the J.P. McBrien Administration Building. This new facility eliminates the need to proceed with that project. Memberships to the Wellness Center will be offered to employees for $10 per month. These funds should be sufficient to cover rental costs and other fixed costs to operate the facility. Wellness Center Background: The County Wellness Program has proven to be an effective device in communicating the relationship that lifestyle has to improved health. We now have the opportunity to enhance the program by providing our employees a Wellness Center at a minimal cost. The Wellness Center will provide a com- plete exercise facility with both male and female shower facilities, exercise equipment including treadmills, rowing machines, exercycles and nautilus equipment. The facility will also be used to conduct six low impact aerobic classes per week that are currently being held in rented space in downtown Martinez. The Center provides ample space to accommodate continued expansion of the exercise programs. The weight and cardiovascular equipment is a positive step in attracting additional employees to participate in the Wellness Program. The Wellness Center will be open for 12 hours a day, which makes the facility available to all employees on their off hours, including shift workers. Employee Wellness Program personnel will manage the facility. Student interns from local community colleges and/or universities will assist inL.51, ffing the f.acility. ITINUCO ON ATTACHMENT' _ YES SIGNATURE: RECOMMENDATION Or COUNTY ADMINISTRATOR RECOMMENDATION 0 ARD COMMITTEE APPROVE OTHER Ire S I GNATUR E(S 1: ACTION OF BOARD ON vww. APPROVED AS RECOMMENDED _J_K OTHER BEG wo 1087— - VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYIES' NOES*. AND ENTERED ON THE MINUTES OF THE BOARD ASSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. cc, County A.e.-ni-nis-tratox ATTESTED DEC , 8 727 Audi tor-Cnnt-zoller 'Personne-1 PHIL BATCHELOR. CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382/7-83 By. DEPUTY -2- ..� r Conference Center: The conference facilities in the County Administrative complex do not meet our needs. There -is-nothing available other than the Board of Supervisors chambers to accommodate meetings of large groups. The Ferry Street property remodeling will also provide a 1,500 foot conference room which will easily accommodate meetings of up to 120 persons. The facility will also be used for management training programs and seminars. Audio visual and sound equipment will be installed to insure the utility of the room for multiple purposes.