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HomeMy WebLinkAboutMINUTES - 06041991 - FC.2 s TO: BOARD OF SUPER] ISORS FROM: Finance Committee 'i.; Contra SuPeAvizon Nancy Fanden 's Costa SuPenv,i,son Tom To�L akzon :.: DATE: lune 4, 1991 °Trq&UU, County SUBJECT: ContAa Costa Ctub Status Repo&t SPECIFIC REOUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1 . Accept the report from the Director of Personnel regarding the status of the Contra Costa Club. 2 . Refer Status Report to the Internal Operations Committee for review. 3 . Instruct the Director of Personnel to provide quarterly financial reports to the Finance Committee. 4 . Encourage Department Heads to allow flexible hours for County employees to take advantage of the Club. FISCAL IMPACT As of the end of the third quarter of operations, the Contra Costa Club Enterprise Fund is on target with the membership quota, however, we project at this point in time that there will be an approximate $72,000 short-fall in operating expenses for FY -1990 - 1991 . This, combined with FY 1989 - 1990 deficit due to unanticipated start-up costs , equals a total FY 1990 - 1991 negative ending balance of $97,000 . The plan is for the operating expenses to be rolled over into the next fiscal year. We predict that a monthly break-even point will be reached by September, 1991 and increasing revenues beyond that point will be utilized to cover the costs incurred during FY 1990 - 1991 . CONTINUED ON ATTACHMENT: XX YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER l L J � SIGNATURE(S): Nan�CadenTom Tor lakson ACTION OF BOARD ON une 4, 1991 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT IV ) AND CORRECT COPY OF AN ACTION TAKEN AYES:_ NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator ATTESTED )6L'0� 'Y /99/ C. Van Marter,, CAO PHIL VTCHELOR,CLERK OF THE BOARD OF Personnel Director SUPERVISORS AND COUNTY ADMINISTRATOR BY DEPUTY M382 (10/88) r t -2- BACKGROUND On February 5, 1991, the Board of Supervisors requested the Director of Personnel to provide a financial status report on the Contra Costa Club to the Finance Committee. The original financial projections for the first year of operations of the Contra Costa Club have been reevaluated with the assistance of the Auditor-Controller' s Office, and as a result, we have been able to redefine our revenue and expenditure projections based on actual experiences rather than assumptions . The adjustments made to the Club' s Enterprise Fund for the current year budget took into account the following situations . 1 . Overall Expenses _ ♦ The term of the lease purchase agreement was amended from 10 to 5 years, thereby, increasing monthly costs . ♦ It was not possible to purchase all necessary equipment outright. The resulting lease costs are therefore higher than planned. ♦ Building occupancy costs were significantly higher than projected. ♦ Other costs such as insurance have been lower than anticipated. 2 . Revenues ♦ Our membership projections at the nine month mark are on target, however, a six month delay in opening the facility has resulted in a membership lag on the fiscal year basis . The original estimate did not provide for a variable fee structure resulting in a revenue .decrease. ♦ Revenue sources such as charging rental for use of facility space were not anticipated. As a result, we have been able to refine the data to accurately reflect the Club' s current and projected financial status . In addition, knowing that our revenues will be less than projected in the budget, we have reduced our expenditures from the original estimate to the extent that we would, and still operate the Club until the end of fiscal year. (See Attachment A) . These adjustments result in an overall $72,900 decrease in expenditures from the original budget. In order to adequately project the Club revenues by year end, a weighted average for membership fees was estimated by taking into consideration the various membership types and the different percentages associated with the methods of members ' payment. In addition, a 7 percent increase in memberships per month were projected until the end of FY 1990 - 1991 to reflect a total membership population of approximately 570 members . The weighted average of $34 . 25 per month multiplied by the number of estimated new members resulted in an estimate of additional revenue until ;year end. The total projected revenue for FY 1990 - 1991 is $292,834 which reflects a difference of $21,417 from the original budget revenue amount of $314,251 . (See Attachment B) . -3- As illustrated in Attachment C, the projected net cost for FY 1990 - 1991 will be $72, 139 which represents a cost of only 20 percent of the total expenditures needed to operate the facility. Our estimates indicate that we will reach a monthly break-even point when our membership population reaches 650 members . With our upcoming marketing strategies, we expect to reach a membership population of 650 members by September, 1991 . Increasing revenues beyond that point will be utilized to cover the costs incurred during FY 1990 - 1991 . Most small businesses fail during the first years of operation due to lack of capitalization. Like any other small business operation, the Contra Costa Club requires significant capitalization to succeed and sufficient time to become a self-sustaining entity. The 1989 - 1990 deficit was due to late opening and unanticipated start-up costs . In order to minimize the length of time required until the Club is self-sufficient, we recommend that the following steps be taken to increase the Club revenues : 1 . Intensify the marketing strategies in an effort to increase the membership population. 2 . Develop programs that will bring in additional revenues in the form of services rendered by the Club staff and rental of Club space for special programs . A marketing plan and financial projections for FY 1990 - 1991 is currently being developed to present to the Auditor-Controller for approval in order to correct the profit/loss situation for this Enterprise Fund. (See Attachment D) . In addition, the Director of Personnel recommends that the attached status report be referred to the Internal Operations Committee for review. The report outlines several programs and services that the Club would like to develop with other County departments and programs in an effort to increase Club revenue. At the Finance Committee' s May 13, 1991 meeting, the Personnel Director was asked to contact firefighters and law enforcement organizations, the Central Sanitary District and other Districts for possible membership in the Club. Also, to pursue setting weekly and/or monthly charges for bicycle commuters to allow for the use of showers and lockers . cc : Personnel Department County Administrator' s Office A.TTACHI`TENT A 1 N N tb N 1 •-+ 00 O M O f� O O a0 O •••+ O u +j 1 .-� •-+ M -4 1 n co t0 O O t0 O t0 t0 O M O C E a I t0 t0 f- t0 I t0 •-+ -4 Ot O 1\ O /n v O f� O O U R O Cl 1 1 V v v ••4 ct -4 3 1 1 U \ a L w a 1 1 d CL > � 1 I " In 1\ •-+ 00 t0 1 CA to t0 M d d to 0 w t0 00 0 0 1••t 0 1 N co v d d to I Cl M -4 .-4 1-4 t0 f, O t0 -ct O .4 In 00 O tv -a43 to M .q i d Ln -4 �••+ t0 N In M .-I Oto w 1\ M O O R O H ,am M 1 Ot v v v• 7 11 v I v L q..- •n 7 1 > 1 1 1 I L 1 N to n d f- ON 1 d t0 t0 t- d In 00 to 00 O f- R C f N -4 co e•r 01 ( d M -4 N •-I N tO Zr In .••� •-ti a O _ I tp d d 1 t0 O N N t0 co d O N 00 t0 T N 4-- 01 I M 01 .-+ 1 d N eY' N N .� 00 iJ V O \ 1 N N I d ••-� vC N N 1 .-+ I ••-� a •0 H t 1 L O R \ I 1 C CL M I 1 u I 1 a w 1 V f- d Ot cn I d d d .+ ON d N d to O tb ♦, O 1 M to 00 to I d N d an O N .-+ %0 O d fl, R 1 N to 00 1 r, O -4 " ct M M M LO LO O M a O --S- I 00 •••� 1 CA • .--� L ++ r N 1 1 U to U M 1 1 R I 1 ++ '+- Ir.- 40 O N O I fh ON N O t0 t0 M a O 1 M to to .+. 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E a to ++ CL to i h C- C .Ll a 7 _ _ O ••- O LR O9 _ '4 7o to L C t- a i I a a C3 C a 47) Us N CI a 7 O 1 a 11 I a N C f- a a R a L a r H CL rt 0 U a 1 a a +j 9- — C_ I > a a O X Cx h 4- 41 +1 H a3 H O c a 0 •: a 2 a vR O O a M a O CL a In a U 1 0 vl !1-% 4-J E v X L Q a to 0 7 'a C r U 1 CL V- r L C >7 o a a U C a O G• C1 r 4J L %- -a -a A I L a f0 ftf a A O N a 11•r O •- s-A a r C O to of O 7 ++ C V1 L C L •r- a 1 C t Y-j A r s V L ++ C a O R V CL a r V to 3 m r r L u L a •r a IA 7 U a .0 E d E Y CL— Y EE a r r O r 10 ++ N r .0 +I CL 1 L E E •r a L CL%- O E r r R C •C 0 0 7 .G E C E A N I .O r a v es C O 3 tt- O O a iJ E — a 0 r- 0 3 a a 0 L I 7 0 CL iJ C.4- 3 3 ut O .0 U ++ 7 vl E E V- U t CL E L U cn O 3 ++ 1 U a ••^1 M tt N 1M 0 'C O N Co .-+ O O .•t 0 0 0 0 0 0 0 •••i U +b U 1 .-I •••I •••t d t0 t- C O O .'I .•t N M M V• Ln t0 t- Ot O Lo Ln M U 1 A .0 0 0 0 0 0 0 R .-4 .••I .•I -4 .•1 .•I .•I " .•+ —4 .d .A N N N .-I R R 1 ++ .-1 .•+ •••I .•t .-+ .-� K N N N N N N N N N N N N N N N L C O \ ( t A V I \ \ \ \ \ \ O 4n \ \ \ \ \ \ \ \ \ \\ \ \\ \ O M a v ++ 1 O a to to to to to to O a to to to to to to to to to u•1 to to to to to C C CL •r V •— .•I e-t •••I .d eA Co U .•t .•I .•t —4 .•1 .•t •-I —4 •••q .4 .d .•t .•t e 4 -4 O X C L t, 1, n P. t, f, .-I •r t- n t- f- r� f�l n 1� tl n !\ t�l f� n t- -J U a 7 1 - m o 0 0 0 0 0 0 > 0 0 0 0 0 Co 0 0 0 0 0 0 O O O O rn+J 1 ++ to to to to to to to ¢ a to to to to to to fn to to to In to to to In CL L O Tf •r C N .•-t .d .-t .•t 1-4 1-1 f•• N e-t .•I 1-4 .-1 .•I .•i —4 .•I .-4 .•a .-t 1-4 .•I -4 .•1 a, O t0 7 C O 1 O n ^ f� f� f� f� O n ttf�,ftn tf\ f- n t- f� L4- v 7 C 1 V 000000 I•- 000000000000000 • ATTACHMENT A (Continued) _ I O O -rr O tD M O st 0% 1 O O .••r- ; ct q .-1 n N O C U 41 ( Q O tD O N ct O 10 to � 1 O 1 I N tD p t0 a \ �••. 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O N N 1 to N N N a 1 ct O tD -4 O to N O fl- 0o In M ( ct I�l O •r 1 M N a N a U I 1\ 00 07 — OO /b O I t0 f� q fi n C E ++ W I ch to N M .-+ .r In N 1 M In 4m Ot I tD O a O N OtO O to 07 I N -4 .-1 v 1 N .--1 � 1 .--1 IC) a to a t\ • L O ro 1 v 4- •,� O 1 I I v It v n to co 1 t t u n > rts 1 1 1 u n i i i ii a L ( f- tD In co 'ct .� O ••1 �. 1 M � N ( tD M a M 11 t0 C 1 Vr M r•1 .Zr f- N 00 * M 1 r1 f- -�t 1 1••1 f- n f- 'r a d O I rl O to I� .•+ N 1 t N O O 1 1- 07 11 a C77 11 >� •� I 1 II �-. +1 4- M 1 01 N 00 ct W) 1 to to O7 1 In ct It It II 00 V U O \ I ct .-+ I O I 1 1 t0 It to 11 •-+ C tU N_ ( •-+ 1 N I M II M 11 - v L O tO \ 1 I I 11 11 L L cn I 1 I 11 11 CL ( 1 1 n 11 U 1 1 I 11 II V O N t0 O f- CT I O '-t u•7 I tD O 11 O II +1 O 1 M N r1 M .-� N N co 1 O V t\ 1 .••� tD II tD 11 IO 1Cp I .� N n 1 O cl 11 00 a +1 -0 h .•y 1 1 i 1 11 11 C 1 IO 07 1 Ot to M I f- cn M 1 M In a In a .Mi L C> N I I I n nN N� v L 1 tO rI 1 1 I a a U d U M 1 1 1 a >1 IO 1 1 1 N a ++ 4- I r` P- coI co O r\ I r- O n O a Gl O ( m N co I (7% In t0 1 In co a co a tT r1 1 ct .••I 1 01 O V 1 In fl- u r` a ro rn 4-1 ro to .-1 1 - I - - I u - a C 9 1 C O 10 Q7 I O .-+ 1 N N t N n- a fz a O .O 00% .~i L L- N 1 .--1 I -4I N n N p +� ro IM v L N 1O N om ~ U a , M 1 1 t n n L n d co 1 1 1 11 q O.ro T L 1 0 0 0 O O O O O O O 1 ar t0 tD 1 N -4 p rt q to A I O O O O O O O O O O ( to In Io a In N L r- 01 ro 1 O 00 O to v O N O O to 1 M O O 1 rl N N N N 4J Com/ 07I O t0 r•-0 N /n O .-+ O rI N 1 co to In 1 .••1Zr n -CTn >7+1 N +1 H 07 I ( N --4 N rt N 1 N P-1 r•1 1 M rt N .-I N •r d7 C 7 -0 0 1 14 1 N I to N M a +1 O 4- W •7 7 01 1 1 1 N N Cd sS- C - to I I 1 It on It L N +1 U 1 1 111 a 7 L U b L 1 O r1 M (n .••t r+ O 1 co 1 00 N co 11 I1. O I tD O7 I- O 0% � O I In I In a to II OE 4- cc 1 t0 O ct r1 to O I I i a7 N U tO 07 I .-+ N 11 t0 11 M 3 I I N 1 M I cn II M 11 �... U co I I 1 II II ro r-1 I 1 i It It 1 I ! u n 1 > > x41 cu cn al a1 1 C 'w L N 4) to L U y q) ro ro 1 to W U +1 10 41 ro >, >- N L L O to L. L r• ( to d 16 O O — R W O ++ w d 1 O C C U L an U E <v CL +-1 1 U C•4J E E G. n 01 17 177 07 N ^ ( >> G1 C C tV N IA E a C C C- O. r1 +11 U I O \ w • t0 O O � v 7 1 b 41 •E +1 O7 m 0 In In -0 O C O I O. U 1O 0 > C ro N C d U t ,C •r 41 U I 7 C -0 +•1 O R O w U d 0 ••- O +-1 1.1 +j U 1 U A O L r L •r +1 O U •r CL b 1 U O O to C +-10 +1 N U 6. C +-1 M OA r O N w G E N A d M A O. d c U r• +j N 4A L N L L W 3 L %.- O d U Of C = C D 4) V- +1 /6 3 L N W f- roQ E +1 L O C +1 t/1 U Z +•1 +J O. 40 V 1 .- A d L 7 ++ %- O CO C W I.1 d C fU H L ( E L +� /O O Q U -0 r L d O L •r O 7 4J I N O ct O .-c M O ct In O t0 n C7O I,n In O U V U to f- CO O O O " r+ r1 40 n � f_ f71 O r•t tD M •r U N N N M M M M M M M d t7 et L In In to # 1-4 '>1 i•. A l N N NN N N N fV N N N N N tO MMM * K _J O In Q O 4J d v +•1 1 In In to In to to In In In In In to In O U In to to O C I- c O. -e- e q -4 .-c .-1 N -4 e-t .•r .- -4 -4 + -4 e-1 O I••1 e-t e-I O f., O O x C f.. fl. 1l 1\ 1 �� 1 f\ f- f� f� f\ fl- f� N L f- n n M O I-- 4J U N 7 'I 0 0 0 0 0 Co 0 0 0 Co 0 0 0 J L 0 0 0 J J O O O7 4J 1 In In In In In In In In Ln In In In In Q +1 to to In Q Q Z O. f-. 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If 71 a II V to L 1 O 1 O O O I O O I O O If 0 II CL O 1 .•+ 1 .--I V' N I t0 O 1 O I` a 1` II O 4.- _ .- O I I &n O ^ I t0 e--t 1 .--t N 11 N 11 V R CT I I n I 00 N I N .-• 11 it co :3 1 1 I 1 1 .--• 11 .--• 11 v 41 CII I 1 1 u II .0 rn i if it a it 11 1 N I c1 a1 I 0 7 1 c of I E U Q N N C w r- I 4J A t V V O_ L- 4J ( N f1 N > > I N N L N N 4J d ty 4J I > N A OL,• v 41 1 E 7 > O to C 1 d •r 'a X 4) V 1 H M O O 11 L fp- W 41 V1 11 L of 7 4J 44 N 4J C to 1 L w OI C N N 7 � 0 7 I 4+ CLC O fU V L C C d L C > 4J N E G7 VI (4 40 I A t6 d L r- •r 'O L N 4J 1 dS d L W .0 E A %- E N t--- N N O 4J 1 V >>r-I In tO n = In In U N V w 00 O1 L a ct n O t0 n to 4)u 1_ rt C " —4 0 0o co 0o 41 ON CA 4c L C O I cn E \ Z O \ \ Z, . 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A 1 4•) r4 rt .-4 rt .•4 N N N N N N N N L V O \ 1 t n t n \ \ \ \ \ \ O vi \ \ \ \ \ \ \ \ \ O 4J 10 4J I O O to to to In to to O 4) Lo to to to to to Lo to Ln C c 4J •r I U •r e-t .•4 .-4 rt r+ -4 O U rt .4 r"t e•4 .4 .•4 rt rt r-1 O 4) C 1 L n r- f\ r\ r\ r- .4 •r n m n r\ r% r\ r\ r\ r- L U c 3 1 0 0 0 0 0 0 0 0 > 0 0 0 0 0 Cl 0 0 0 O - — Cn 4J I4J to to Ln to to to to Q 4) to to to to In w) to to to CL L O •C •r 1 C N .--t rl rt a-4 —4 rt t•- to -4 .••t .•4 .y rt .-t t•4 M t-4 4), O t0 3 c O O n r` r\ n r- r\ O r\ r` t\ n r\ r\ r\ r\ L 4- .l2 3 C U 0 0 0 0 0 0 I-- 0 0 0 0 0 0 O O O ATTACHMENT C (Continued) I 00 O O q0 O Q O t0 M O S 01 N 01 C V ++ 1 t0 O M O d 0 t0 O N st O t0 an 01 I O O .--t I N \ �_. a11 C E a11 1 M O f� O NCD 01 - O to .-+•O n M O O t0 ( to C> t� L to 0 t 1 v •--4 .--4 v.-•� .-ti r .~..i I •--� 1 > I _ I _ 1 .-. —Ln 1 t0 O O O M O frr O to In O N t0 O Ct O 01 en 1 -4* t0 N N 1 t0 t Cc O co «•1 co O a 0 C% .--� O to N O n -4 to M I 1 t co O d I M V N � I O v CO n M�O t` CO 01 ._.�11'f M A N N .--� Ot n 1 r, w w O 1 t0 O t6 O chit W I v M 01 t0 N M .--� •••� � — N I M to 01 01 1 t0 ve-c .-� .-ti v I N .--i v l esti ��•L 4L•- •1011 7 I 1 I to coo 1 I I L I t0 00 O n n t0 1n O -�r +-+ O P V1 M �' N 1 t0 b e 1 v to e-ti 1- d• cn .--c a• t\ N co V M 1 .-+ t- V 1 ••-� NO_ _ I O N 00 O r\ 0 1n t\ •-� NI N O O I T .4., N N — O1 N OCT to I to t0 01 1 to S- •L M I I 1 V n I 1 I W 4- 1 V to O co V O N t0 O t- 01 I O .--• to' I t0 4•+ O 1 t0 O a• t\ M N- .--� cn .--i N N co I O t- I e-t o y .--t 1 M 1n 10 O 00 f� •••� �' 1 �--� N fl I O C I a 01 1 .-•� -4 .--� Ol 1n c+'1 1 t- ON M - 1 cn M L 4J �--• 04 1 I .•+cn cli 14 I N U to M I 1 1 >1 ca I I I 4+ 4- I t0 t0 M f\ __T c0 1 co O f� 1 !� N O 1 M O1 N cn N co 1 O1 O1 4.0 I 1f') cm 1• 1 Ln Ct .--4 1 Ot O -cr 1 U•11 c 7 r Ccm I N 4+ M o+ d -0-bV Q+jt\7 I I I O 7 tcoo A I 1 I L •e-� w C1-,o T L I O 0 0 0 0 0 0 O O O O O O O 1 tp t0 1 N a 10 1 1n 1noOOOO OOoOo 00 1 1n � � 1 1n L w _ 1 to nOOOOOO toctONO 0111 I M Coco I r` t0 d O .. .. .. .. .. .. .. ., .. .. .. 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C d 4J 1 U t M E L V = E L 4+ CO O fS V '0 •r L N O L y >> y 04-t 4-) C) e4NOvOrtite9Ov tnOt0t-, 01 W tntnO V C U t0 f, Ol O to to t0 n co O O co e••t -t e 4 t0 t, f, n Cf O -4 t0 M zi u 1 .•-t -4 -4N N (V N N N m M M M M M M e! a7 It L to to an -4 tR 0 b 1 N N N N N N N N NN N N N N N N N N N x go M M M + L V O \ \ \ \ \ \ \\ \ \\ -- \ \ \ \\ \ \ \ O L \ \ \ O O 41 v +J I to to to to to to to to to to to to to to to to to 1n to O u to to to O C C 4J -4 .•-1 e-4 14 e--1 esti e-1 e 4 e1 N e-t e4 e4 .-t rt e4 N -4 e-ti O e•-1 e1 e-4 O O u •C 1 fl- Il- f� 1\ 1� n f� t� n n I� t- t-- f- n n c- f� f� N L n t- n M 41 u C 7 1 O O O O O O O Cl O O O O O Cl O O O O O J x 0 0 0 J O Cf++ 1 to to 1n to to to to to to to to an to to to to 1n to to Q +11 to to to Q rL -f -4 -4 -4 -4 .-ti . t -4 -4 4 rt -4 -4 1-4 1-4 O et r1 -ti 7 O fffV, r, td O F' O L4- c '1 OOOOCDP OOOOOOOOOOOOOO F- OOO H ATTACHMENT C (_Continued) a C U 4J I 1 N 1 r4 O 1- tb U a m > Q _ 1 __ "a _ n 1 n O I M 4D M M 1 O O O 1 O tT a O% 11 I N t0 1 M O\ co N 1 O, a 0 1 t0 M u M 11 I 1 Iv •• a •• 11 C E 4J 4) I .-4 ci I M M V' ,-- to M I t N N I u N 11 O R O H O1 1 ...r4 1 rt t0 N 1 M `� i t\ a f- a I� G• 7 1 I ,•4 ,•4 1 l a v 11 S- 4- 3 1 1 1 1 N u > 1 1 1 1 a u L I t\ O 1 M to M M 1 .o O f 0 4T a O� ft R C 1 N to 1 M to co N I40 � I v M a M 11 a) O _ 1 cY 01 I to Q n 40 1 qp C I II .-•� II 4J 4- OA 1 -1 --f 1 M oo to M I f- ,•-� 1 .� N Op 41 U O \ I ,--� 1 ,-� N 1 f- .•� C O NI ...i 1 �' .•4 .-� 1 N 1 11 II L O R \ 1 1 1 1 11 II L C M I 1 1 1 11 II t1 I 1 1 I II 11 11 U .l•. N O 1 O O n 4m II O I to I to N to I en 40 1 t0 40 It t0 n to ON I 1 tT to 4b 1 M m1 rn v u v n C 1 (0 Ch I I n M a ct U en 4) O \ I 1 O 1 .-4 1 Cl) u Cl) 11 .-1 f-. 4J r• N a r4 It a II fO \ 1 1 I I a a U 4) V M I I 1 1 U U >, R a 41 4- 1 1 N 4p 1 co 1 O a —co a 4v O 1 I rn Cl) I N I v e v a n N f O 1 N a N a b rn 4J -0 to ,•4 1 1 - w 1 w U c 7 1 �� C O R 0, I I tri r, I t� I D+ a rn a 0 .0O en v i va va 4� "0 (M % L d to .N+ I 1 I I a tl U 4) r1 = 0. O \ I I 1 1 a a w 41 U 4J M 1 1 1 I 11 N •O 0 R R I I I 1 a a I- --,I a) .. O.•O >, I- -I I .-+ I r+ C� I O� 11 U R R 1 to I to O 1 O It 11 Cl1 N O 1 C a N R a) R >, W 4J .4 1 I I I a a 4J 41 tT 1 ( N 1 N N I N a Y - T+j 4 0 O) Ol C 7 'C O I I M I M 1 - U It 4J O U 7 tT 1 ! v 1 v 1 Y a C 4J i 'C -0 0% I 1 I 1 n It m w L to L T) L 1 1 I I a II It U A S. 1 O1 O Cl O 1 O O 1 0 co N co II O. O 1 .-+ 1 14 ct N 1 40 O 1 0 tp U co a E 4- 1 to 1 In tT I w .+ I .. -4 It .4 It O r• O 1 — 1 — I I 11 •• 11 U R tT 1 f ^ 1 C. N 1 N to II to II M 7 1 1 1 1 I N u N ft U') +j tT f 1 I I u u +� U to I 1 I I Y 11 R 4 - I 1 1 I N 11 e-4 1 I I I N 1 1 1 1 1 u u 1 N I a) a) I 7 7 1 C 4) 4) r• 1 4J R L V U O L 1-t I 4AO. to > > r 1 0) H t•. y N ++ 4) > tv to CL .�4 1I v E > > o two L .� c I a) .- •0 x N V 1 0 0 L L � � 4) 1 d to 1 tU 44 C 1A 3 4J -J 7 U O 7 N 1 CL C O 4) V .G C •r C U 44A 1 L C 4 b V t G C > 4J V O 1 CL $- C > 4J W E d 0 4A i Ru I to 4)• L — •r - 4) •r � I oa w L 4) t E R L E N >, IA Vf U C U 4) co 0% f ct cf' n O tD r\ M 7 U I C e-4 .-4 O 40 00 co 4) 0% C% 4c 4 R O R I O 0% 01 4c 4- Ol tT 0% k C ON 0% t U o \ 1 E \ \ CD \ \ \ O R \ \ O to ¢ 0 4J ++ I to to O CID an to to O to to O .-+ 1- C C 4Je- .- 4 a-y c 4)1 r• -4 r4 %D '•4 1-4 co f�l Cl O 4) •C 1 O f� f� (n O)I\ n n Ol 4) - f- tT O I••• A U C 7 1 0 0 J � C) 0C) J U O O J J p O Cf 4J I H to to Q .0 to to In Qto to Q Q Z CL L O .-+ -4H V .-r 1-4 ,-4 F'- •E .� rt 1•- F- ¢ a) O 4D O C O 1 >` n O r\ I- 1\ O fl Il O O rx O O F-- O O O F•- O O F- F- c.7 ATTACHMENT D Office of COUNTY AUDITOR-CONTROLLER Contra Costa County Martinez, California April 29, 1991 TO: Phil Batchelor, County Administrator FROM: Kenneth J. Corcoran, County Auditor-Controller by: gnger� ;a d�Principal Accountant . SUBJECT: County Health Club Enterprise fund _ At the request of your office, we have assisted the health club staff in analyzing and interpreting the financial reports for the Contra Costa County Health Club Enterprise fund through March 1991. We also assisted in developing the procedures and techniques necessary to project the anticipated revenue and expenditure activity for the balance of fiscal year 1990-91. We have reviewed the resulting financial projection-and believe that the projected year end deficit resulting from current year operations of approximately $72,000 is a reasonable estimate based on year-to-date and proposed activity. Combined with the 1989-90 deficit balance the 1990-91 ending negative fund balance is estimated at approximately $ 97,000. California Government Code Section 30200 provides for the Accounting Standards and Procedures for counties. Chapter 13 of the AS&P provides two acceptable methods for correcting profit/loss situations for enterprise funds: 1. Adjust user charges or fee for service rates. 2. Transfer appropriations from appropriate funds. (i .e. County Subsidy) These actions may extend beyond one year if a plan acceptable to the County Auditor is followed. We are currently working with the health club staff and your office to establish guidelines which will provide for continued monthly status reports to your office. / D March, 31, 1991 TABLE OF CONTENTS I . OVERVIEW OF THE FACILITY, PROGRAMS AND SERVICES II . BENEFITS OF THE CONTRA COSTA CLUB III . STAFFING STRATEGY IV. TYPES OF CLUB MEMBERSHIPS AVAILABLE AND FEE STRUCTURES V. PHASE IN APPROACH TO ACCEPT MEMBERSHIPS VI . CURRENT MEMBERSHIP STATUS VII . IMPORTANCE OF MEMBERSHIP RETENTION VIII . FINANCIAL STATUS AND PROJECTIONS IX. CURRENT PLANS TO INCREASE MEMBERSHIP. MARKETING STRATEGIES X. RECOMMENDATIONS FOR FUTURE PROGRAMMING XI . REFERENCES XII . ADDENDUM I . OVERVIEW OF THE FACILITY, PROGRAMS AND SERVICES The Contra Costa Club opened its doors for business on July 2, 1990 . The 5,300 square foot facility is located in the heart of downtown Martinez at 627 Ferry Street. The health and wellness facility features a variety of exercise equipment including stationary bikes, treadmills, stairmasters, rowing ergometers, a cross country ski machine, a recumbant bike, free weight equipment, a full line of Paramount circuit training equipment, an Aerobic Exercise Studio, and locker and shower facilities with a dry heat sauna in each locker room. There is free use of day lockers available to all members and a limited number of permanent rental lockers in both men' s and women' s locker rooms . The Club also offers a monthly towel service for a nominal fee. The current Club hours of operation are Monday - Friday, 6 : 00 a.m. - 9 : 00 p.m. and Saturdays from 8 :00 a.m. - 5 : 00 p.m. When an individual joins the Contra Costa Club, they must first complete a Membership Application, a detailed Health History Questionnaire, and read and sign a Release From Liability Form. If the individual does not pass our Medical Clearance Guidelines, a medical clearance statement from their physician must be received by the Club Membership Coordinator prior to allowing them to utilize the Club. Each Club member is scheduled for a Fitness Testing Evaluation and an Exercise Equipment Orientation with one of the .Club's exercise instructors as their first introduction to the Club. The Fitness Testing Evaluation consists of a blood pressure test, a cardiovascular test, a body composition analysis and muscular strength, flexibility and endurance tests . The results of these tests are compiled into an individualized report and then given to the Club member. All .information obtained in these evaluations are strictly confidential . Each members is then given a one-on-one, personalized exercise prescription and an orientation on all of the equipment. All Club members are also encouraged to constantly update their exercise programs with our exercise instructors in order to ensure that they are working at their appropriate capacity and are achieving maximum benefit from their individual program. Blood pressure testing equipment is readily available on site and all Club staff are qualified to take blood pressure readings at any time. Many members track their blood .pressure readings at the Club on a ongoing basis . We currently offer 11 low-impact aerobic exercise classes each week taught by certified aerobic instructors . Additional exercise classes will be gradually added to the class schedule. All Club members are encouraged to participate in the ongoing exercise competitions and contests conducted by the Employee Wellness Program. Incentive prizes are awarded to the 1 . 2. participants who reach set fitness goals during these competi- tions . All Club members also receive a copy of the monthly Contra Costa Club Health and Fitness Newsletter. This newsletter highlights Club members ' success stories, advertises new Club programs and services, provides up-to-date information on nutrition and health topics, and provides detailed instruction on special exercise routines . Plans are underway to renovate the 1,000 square foot second floor to be used as additional space for exercise equipment: This expansion will allow the Club to adequately service a larger membership population. 3. II . BENEFITS OF THE. CONTRA COSTA CLUB The concept to establish a health and wellness facility for County employees was initiated by County Administration and was supported by the Board of Supervisors . The main objectives for establishing .the Contra Costa Club were: 1 . To expand the existing Employee Wellness Program so that it could be operated in conjunction witha comprehensive, full-service fitness and wellness facility. 2 . To demonstrate to the employees the County' s support and interest in their health and well-being. 3 . To obtain the benefits that a health and wellness facility provides to an employer and to provide direct benefits to the County employees. According to the American Heart Association ( 1984 ) , the benefits of having fit employees include the following: ♦ Reduced health care costs ♦ Lower absenteeism ♦ Lower turnover ♦ Higher morale ♦ Lower risk of developing cardiovascular disease ♦ Lower risk of injuries during work or recreation ♦ Faster recovery time, from injury or illness ♦ Increased energy and stamina ♦ Increased mental alertness ♦ Increased self-confidence and self-esteem ♦ Less tension and anxiety ♦ Increased productivity Documentation of Benefits The benefits of an employee health and fitness program are not always as obvious as the costs, and some benefits may be difficult and sometimes impossible to document. However, benefits such as reduced health care costs, absenteeism, turnover, injury rate, disease risk, and anxiety levels can be documented and analyzed by scientific methods . Although the process can be quite extensive and time-consuming to obtain accurate records for scientific analysis, these benefits are considered tangible and measurable. 4 It is also widely accepted . that • other benefits such as productivity, stamina, self confidence, morale and mental alertness accrue to employers who sponsor active fitness programs for their employees . ♦ Escalating Health Care Costs Health care costs in the U.S. continue to escalate at a rapid pace and according to the US Health Care Financing Administration and Economic Report of the Presidents ( 1989 ) , America' s per capita health care costs will more than double in the 1990 's . (Refer to Graph A) . American business will be responsible for a larger share of .this financial burden with each passing year. 1984 research demonstrates that health care costs are rising 2 .5 times the . Consumer Price Index, and the expenses borne by business are increasing at twice this inflated rate. (Refer to Graph B, Ostwald, 1986) . GRAPH A GRAPH B Cost of America' s Health Care Range of Annual Cost Per Capita Amount Increase 1986 $$$$$ S1,837 20% 1987 $$$$$$ $1,973 tG% zo% 1990 $$$$$$$ 52,511 15% 2000 $$$$$$$$$$$$$$$ S5,551 10% 8.7% 5% .. 3.2/0 0% Consumer Total Health Care Price Health Care Costs Paid Index costs By Business Since most of the health care dollars are spent on the treatment of preventable diseases caused by the American worker' s lifestyle -- sedentary, stressful and nutritionally poor -- many , employers have instituted cost-containment policies to minimize misuse - of the health care system. To take it further, many companies are now implementing sound health and fitness programs to help prevent the illnesses which cause these costs to soar. . 5 ♦ Reduced Health Care and Insurance Costs The following recent studies demonstrate evidence of lower medical and insurance costs for exercisers : 1 . The Institute for Aerobics Research found that low physical fitness was an important risk factor in both men and women. Higher levels of physical fitness appear to delay all-cause mortality, primarily due to lowered rate of cardiovascular disease and cancer. (Refer to Graph C, Blair, 1989) . GRAPH C Fitness Prolongs .Life Institute for Aerobics Research Deaths Per 10,000 People in a Year 80 Low Fitness 64 Medium Fitness 60 A High Fitness 4 40 0 26 20 r r% k20 i6 A 7 0 Men Women 2 . Mesa Petroleum showed that exercisers filed health care claims that averaged $217 per year less than non-exercisers . (Gettman, 1986 ) . 3 . At Tenneco, the average annual medical claim for non-exercising females was more than twice the average for women who participated in the in-house exercise program and demonstrated an annual savings of $896 .00 in medical claims . For men, the average claim for non-exercisers was nearly twice that of exercisers with a savings of $443 in medical claims (See Table 1, Baun, 1986 and Bernacki, 1987 ) . TABLE 1 Average Annual Medical Claims at Tenneco Exercisers Non-exercisers Savings Men $561 $1,003 $443 Women $639 $1,535 $896 6. ♦ Decreased Absenteeism and Turnover 1 . A number of organizations have reported significant reductions in absenteeism and dollars saved due to their employee health and fitness programs . (See Table 2 , Fitness Systems, 1990) . TABLE 2 Absentee Days Saved Per Participant Prudential 5.1 MetroFit 3.4 Canadian Fitness&Lifestyle 2.5 The Travelers 1.2 Mesa Petroleum 0.9 2 . Toronto Life Assurance found that the employee turnover during a 10-month period was substantially. lower in program participants ( 1 .5%) than in non-participants ( 15%) . (Shepard, 1986) . 3 . A study performed by R. J. Shepard (Shepard, 1987 ) suggested that $40 per worker per year can be saved through containment of injuries during leisure hours resulting from enhanced physical fitness . This was calculated using Pravosudor' s ( 1978) assumption that a fitness lifestyle program could reduce the cost of recreation injuries by at least 50 percent and that there would be a reduction in absenteeism associated with the reduction injury rate resulting in sick time savings . ♦ Enhanced Performance and Productivity Although individual changes in productivity are hard to measure, companies with health and fitness programs report improvement in energy level, job attitude, work performance and overall morale -- all critical factors in enhanced productivity. 7 1 . Tenneco believes that its support of an employee fitness program attracts more productive employees . Tenneco found "a positive association exists between above average job performance and exercise adherence" . (Refer to Graph D, Bernacki, 1984) . GRAPH D Tenneco Performance Chart above average ®average below average 100% 40.2 44.5 46.2 46.9 500/6' �4 j i j38.1� 40.0/ 42.2/. i 21.4 17.4 13.8 Oo/u 10.4 Non- <1 1-2 >2 Exerciser ---------Sessions Per Week-- - - - 2 . The Canada Life Assurance Company experimental group realized a 4 percent increase in productivity, compared to the control group, after starting an employee fitness program. (Shepard, 1983) . 3 . Swedish investigators found that mental performance after exercise was significantly better in the physically fit than in the non-fit. Fit workers committed 27 percent fewer errors on tasks involving concentration and short-term memory, as compared to unfit workers . (Sjoberg, 1983) . 4 . Ford Motor Plant in Oakville, Ontario, reported a dramatic drop in the number of cars returned for warranty repairs following the implementation of a program designed to enhance the quality of working life for the employees . Conclusions of this study suggest that the satisfied worker has a better perception of health and is not likely to disrupt company productivity by smoking or alcohol/drug abuse. (Shepard, 1987) . 8. ♦ Comprehensive Costs Benefit 1 . Several companies have conducted comprehensive cost-benefit analysis of their employee fitness 'programs, comparing dollars saved to dollars spent; and they report considerable savings from $1 .91 savings to dollars spent at Prudential Life Insurance to $5 .78 at Kennecott Copper Co. (Refer to Table 3) . TABLE 3 Dollars Saved/Dollars Spent Company Kennecott Copper Co. $5.78 Equitable Life Assurance $5.52 Metropolitan Life Insurance $3.15 Motorola $3.00 Blue Cross/Blue Shield of Indiana $2.51 Prudential Life Insurance $1.91 2 . Investigators showed that regular exercise resulted in 78 fewer coronary heart disease events over a 30 year period. The costs of an exercise program is two to four times more cost effective than treating illness, such as angina or hypertension (which cost approximately $25,000 to $40,000 to treat) . (Hatziandreu, 1988) . 3 . Results of the Mesa Petroleum Study show that even if the intangible benefits of an exercise program are overlooked, an employee fitness program recovered 107 percent of its operating budget . ( i .e. , it paid for itself) from the savings in absenteeism and medical costs by having employees who exercise. (Gettman, 1986) . BOTTOM LINE As health care 'costs continue to escalate at dramatic rates, more and more companies are providing their employees with the means of sound health and fitness practices to fight this trend. The financial risk is not usually centered around what an employee fitness program will cost, but whether it will save money in the long run and whether such savings will outweigh the cost of the program. 9 Although many employers have found that the return on investment for a health and fitness program may not be .immediate, they found that the tangible (measurable) benefits of an employee fitness program added to the intangible (undocumentable) benefits more than justify the investment in the program. 10. III . STAFFING STRATEGY The overall development, physical design, equipment selection and concepts for programs, services and marketing strategies were conducted by the Employee Wellness Program staff which consists of two full-time, permanent positions -- a Wellness Coordinator and a Senior Level Clerk. In order to adequately staff the facility which is in full operation 83 hours each week, a creative approach was needed to minimize staffing costs. An agreement was reached with Dr. Jack Carhart of the Community College District wherein the District would commit 30 hours of professional instructor time a week in exchange for an in kind contribution of memberships for a limited number of District employees . We now have four instructors who each have a Masters Degree in Exercise Physiology and extensive experience in designing, developing and monitoring safe and effective exercise programs . This agreement saves approximately $55,000 annually in staffing costs . CLUB STAFF - PERMANENT 1 . Anne M. Sommers-Pato, Wellness Coordinator and Club Manager ♦ Bachelor of Science in Nutritional Science and Exercise Physiology, U.C. Davis ♦ Certified in CPR 2 . Nancy Zandonella, Clerk - Senior Level and Club Membership Coordinator ♦ Certified in CPR CLUB STAFF - CONTRACT and LIMITED TERM 3 . Dave Christensen, Administrative Intern ♦ Bachelor of' Arts in Recreation Administration, CSU Chico ♦ Certified in CPR 4 . Angie Jacobs, Administrative Intern ♦ Bachelor of Arts in Psychology, UC Berkeley ♦ Masters of Arts Candidate in Sports Psychology, JFK .University ♦ Certified in CPR 11. 5 . Rhonda Howard, Administrative Intern Bachelor of Science in Dietetics, CSU Chico ♦ Registered Dietician ♦ Certified in CPR 6 . Susan Clark, Exercise Physiologist ♦ Master of Science in Kinesiology and Physical Education, CSU Hayward ♦ Certified Athletic Trainer ♦ Certified in CPR and First Aid 7 . Colleen Coakley-Ralston, Exercise Physiologist ♦ Master of Science in Exercise Physiology, CSU Chico ♦ Certified Aerobics Instructor ♦ Certified in CPR 8 . Gail Tennison-Luthy, Exercise Physiologist ♦ Master of Arts in Exercise Physiology, CSU Chico ♦ Certified Aerobics Instructor ♦ Certified in CPR and First Aid 9 . Carol Staropoli, Exercise Physiologist ♦ Master of Arts in Sports Psychology and Physical Education, University of Iowa ♦ Certified in CPR and First Aid As can be seen, the Club staff provides not only education, experience and qualifications to the Club, but also the intangible skills of motivating our members to change and improve their lifestyle and to maintain their new programs . Our well- trained staff are the best sales people we have and will continue to play a major factor in our future success . 12. IV. TYPES OF CLUB MEMBERSHIPS AND FEE STRUCTURES A variety of membership options are offered to all Contra Costa County employees, their spouses and dependents and on a limited scale, to employees of local businesses and government agencies . As indicated on the attached Membership Fee Structure forms, there are a variety of different membership types to fit a variety of needs. 13 COCA COSTA \ — Membership Fee Structure VJanuary, 1991 I. PERMANENT COUNTY EMPLOYEES REGULAR SINGLE MEMBERSHIP - Applies to all permanent County employees. Initiation Fee: $50.00 Monthly Dues: $35.00 3 Months in Advance: $105.00 6 Months in Advance: $195.00 1 Year in Advance: $360.00 DUAL MEMBERSHIPS Applies to any of the following dual combinations where at least one of the individuals is a permanent County employee and resides at the same address. ❑ Husband and wife. ❑ Any two persons 18 years of age or older. ❑ Single parent and one dependent 18 years of age or older. Initiation Fee: $75.00 Monthly Dues: $55.00 3 Months in Advance: $165.00 6 Months in Advance: $315.00 1 Year in Advance: $600.00 DUAL ADD-ON MEMBERSHIP- Adding an individual onto an existing Regular Single Membership, thereby,converting it to a Dual Membership. Add-on members must be at least 18 years of age or older and reside at the same address as the existing Club member. Initiation Fee: $25.00 Monthly and Advance Dues are the same as the Dual Membership Dues DEPENDENT ADD-ON - Applies to dependents at least 16 years of age or older who can be added onto an existing Regular Single or Dual Membership. Dependents age 16 - 18 must be accompanied by the . primary person of their membership at:all times while at the Club. Dependents Age 16 - 18 Dependents Age 18 or older Initiation Fee: $25.00 Initiation Fee: $25.00 Monthly Dues: $18.00 Monthly Dues: $35.00 3 Months in,Advance: $50.00 3 Months in Advance: $105.00 6 Months in Advance: $100.00 6 Months in Advance: $195.00 1 Year in Advance: . $185.00 1 Year in Advance: $360.00 CONTRA COSTA CLUB 1 627 FERRY STREET MARTINEZ CA 94553 (415) 646-1540 14. II. TEMPORARY AND CONTRACT COUNTY EMPLOYEES All membership fees and dues and membership types are the same as for the Permanent County employees, however, Temporary and Contract County employees must pay for their membership dues 3 months, 6 months or 1 year in advance only. III. COUNTY RETIREE MEMBERSHIPS RESTRICTED RETIREE MEMBERSHIP- Applies to Contra Costa County retirees and their spouses or housemates and dependents currently residing.at the same address. Payment for Restricted Retiree Members must be made 3 months,6 months or 1 year in advance only.. Hours of Club availability for Retiree Memberships are restricted to non-peak hours as determined by the Club management. Non-peak hours currently are: Monday - Friday: 8:30 a.m. - 11:30 a.m. 1:30 p.m. - 4:30 p.m. 7:00 p.m. - 9:00 p.m. Saturday: 8:00 a.m. - 5:00 p.m. Restricted Retiree Single Membership Initiation Fee: $30.00 3 Months in Advance: $60.00 6 Months in Advance: $110.00 1 Year in Advance: $205.00 . Restricted Retiree Dual Membership Initiation Fee: $50.00 3 Months in Advance: $105.00 6 Months in Advance: $195.00 1 Year in Advance: $360.00 Retiree Dependent Add-On Membership .Dependents Age 16 - 18 Dependents Age 18 or older Initiation Fee: $25.00 Initiation Fee: $25.00 Monthly Dues: $18.00 Monthly Dues: $35.0) 3 Months in Advance: $50.00 3 Months in Advance: $105.00 6 Months in Advance: $100.00 6 Months in Advance: $195.00 1 Year in Advance: $185.00 1 Year in Advance: $360.00 UNRESTRICTED RETIREE MEMBERSHIP-County Retirees who wish to utilize the Club facilities during all Club hours of operation may opt to apply for full Club memberships and pay the regular fees and dues. However, membership payment must be made 3 months, 6 months or 1 year in advance. IV. ADDITIONAL SERVICES: ❑ Day use lockers are included in the membership fees for all Club membership types. ❑ Towel service is available to all members for a fee of$2.00 per month, $6.00 for 3 months,$10.00 for 6 months or$20.00 per year. ❑ All aerobic exercise classes conducted,at the Club are included in the membership fees. 15. CONTRA COSTA Corporate Membership Fee Structure Local Business November 1990 CORPORATE INDIVIDUAL MEMBERSHIP - Applies to individual Corporate sponsored employees. Initiation Fee: $ 75.00 Monthly Dues: $ 40.00 6 Months in Advance: $225.00 1 Year in Advance: $420.00 CORPORATE DUAL MEMBERSHIPS- Applies to any of the following dual combinations where at least one of the individuals is a permanent employee of the Corporation sponsoring the membership. ❑ Husband and wife. ❑ Any two persons 18 years of age or older residing at the same address. ❑ Single parent and one dependent 18 years of age or older residing at the same address. Initiation Fee: $100.00 Monthly Dues: $ 65.00 6 Months in Advance: $375.00 1 Year in Advance: $720.00 CORPORATE DUAL ADD-ON MEMBERSHIP- Adding an individual onto an existing single membership, thereby,converting it to a Dual Membership. Add-on members must be at least 18 years of age or older and comply with all of the Corporate Dual Membership regulations.. Initiation Fee: $ 25.00 Monthly and Yearly Dues are the same as the Dual Membership CONTRA COSTA CLUB 0 627 FERRY STREET 71 MARTINEZ CA 94553 (415) 646-1540 16 CORPORATE DEPENDENT ADD-ON MEMBERSHIP - Applies to dependents at least 16 years of age or older currently residing at the same address as the primary person on the Corporate sponsored membership. These dependents can be added onto an existing Individual or Dual Membership. Dependents age 16 18 must be accompanied by the primary person/sponsor of their membership at all times while at the Club. Corporate Dependent Add-On members must comply with all of the Corporate Dual Membership regulations. Dependents Age 16 - 18 Dependents Age 18 or older Initiation Fee: $ 25.00 Initiation Fee: $ 25.00 Monthly Dues: $ 20.00 Monthly Dues: $ 40.00 6 Months in Advance: $110.00 6 Months in Advance: $225.00 1 Year in Advance: $218.00 1 Year in Advance: $420.00 ADDITIONAL SERVICES: 0 Day use lockers are included in the membership fees for all Club membership types. 171 Towel service is available to all members for a fee of$2.00 per month, $10.00 per 6 months or$20.00 per year. 17. V. PHASE IN APPROACH TO ACCEPT MEMBERSHIPS In order to program members into the Club fitness testing and exercise prescription process, members were accepted into the Club through a phase-in approach. This approach safeguarded against overcrowding during our crucial opening phase of . operation and allowed Club staff to test Club procedures and operations. Following is a breakdown of the phase-in approach for fiscal year 1990 - 1991 . Phase New or Additional Memberships Available OPENING PHASE * County Charter Memberships June/July/August * Corporate Charter 1990 Memberships * County Regular Single Memberships PHASE I * Dependents and Spouses of September/October County employees 1990 * Regular Corporate Memberships November/December * County Retirees 1990 PHASE II * County Temporary and January Contract employees 1991 * Housing Authority employees * Dependents and Spouses of Corporate employees February/March * Concentrate on marketing 1991 strategies to acquire additional County and Retiree Club memberships as well as Corporate Club memberships . PHASE III * Began to offer guest passes, April/May/June one-day free trials and 1991 2-week free passes to allow potential members the opportunity to utilize the facility prior to officially becoming a Club member.' Continue efforts to increase memberships through marketing strategies . 18. VI . CURRENT MEMBERSHIP STATUS As of March 31, 1991, there was a total *of 466 Contra Costa Club members . The Club originally opened with 153 members and through the first nine months, the membership has increased by 205 percent. The membership population is comprised of an extremely diversified group of individuals of all ages and fitness levels, however, all members share a common goal -- to improve their health status and develop positive lifestyle changes . Breakdown of Membership Population The Club membership population is comprised of 65.5 percent County memberships and 34 .5 percent non-County members . (See Graphs A - E) . GRAPH A CONTRA COSTA CLUB County & Non-County Memberships County Members 65.5% Non-County Members 34.5% 19. GRAPH B CONTRA COSTA CLUB Total Memberships County Single 53% County Dual/Family 12% County Retiree 0.5% Misc Corp Dual 2:5% Misc Corp Single 16% City of Martinez 5% Community College 11% GRAPH C CONTRA COSTA CLUB County & Non-County Memberships -------------- Retiree 0.5% 6 Dual/Family 12% Non-County Members County Members 34.5% 65.5% Single 63% Total County - ------------ Misc Corp Dual 2.6% Misc Corp Single 16% County Non-County 66.5% 34.5% City of Martinez 5% Com College Dist " --------- 11% Total Non-County Members 20. GRAPH D CONTRA COSTA CLUB County Employee Memberships County Single 81% County Retiree 1% County Dual/Family 18% GRAPH E CONTRA COSTA CLUB Non-County Memberships Misc. Corp. Single 46% Misc. Corp. Dual/Fam 8% Community Co}lege City Of Martinez 33% 13% 21 . County Memberships A review of the County memberships reveals that the County Departments with the greatest percent of the total County memberships are the Health. Services Department (20 percent of total) , District Attorney ( 12 percent of total) and the Sheriff ' s Department ( 11 percent of total) . However, when comparing the various departments according to the percentage of the department employees who are utilizing the Club, we see that the participating departments have anywhere from 0.5 percent up to 33 percent of their employee population utilizing the Club. This detailed departmental information is especially useful when developing specific marketing campaigns to targeted groups of County employees . (See Table 1) . TABLE 1 CLUB USAGE BY DEPARTMENT Department Percent of Department Employees Utilizing Club Personnel 33% District Attorney 20% Superior Court 20% Public Defender 16% Building Inspection 12 .5% Auditor-Controller 12* County Counsel 11% Community Development 10% Treasurer-Tax Collector 10% Board of Supervisor' s 10% Retirement 10% Clerk-Recorder 8% Assessor 7% Sheriff ' s Department 5% County Administrator 4% Probation 4% Health Services 3% General Services 3% Social Services Department 2% Consolidated Fire 2% Mt. Diablo Municipal Court 2% Public Works 1% Animal Services 1% Library 0 .5% 22. Additionally, a survey reveals that the Club is utilized by all levels . of employees. and elected officials including County Supervisors, Superior Court Judges, Department Heads, physicians, lawyers, peace officers, social workers, analysts, clericals, fire fighters, custodial and maintenance crews, etc. Average Age and Gender Our oldest Club member is a County Retiree at the age of 74 and our youngest is a Dependent Member at the age of 16 while the average age is approximately 39 years of age. This average age is a significant contrast to the average membership age of most health clubs which is approximately 28 . Because of this, our programming reflects a greater emphasis on designing programs and offering services for a generally older, less fit population. Health and wellness education and detailed instruction on the safe and proper use of the exercise equipment -is especially important in a population where a great number of our members haven't participated in an exercise program for many years . Club membership consists of 52 percent males and 48 percent females . These, statistics. are encouraging because it demonstrates that our programming is appealing equally to both sexes . Growth of Membership Membership growth was controlled by our phase-in approach in accepting Club memberships and the general seasonal growth patterns experienced in most health clubs . (See Graph F) . Anticipated membership growth from April, 1991 through June, 1991 was calculated taking into consideration our current and upcoming marketing strategies and the average percent of membership growth from January through March. (See Table 2) . Graph F and Table 2 were both developed taking into consideration all Club members that have expired or terminated their membership. GRAPH F Contra Costa Club Membership Growth, July 1990 - June 1991 600- 500- 400- 00500400 Aso Number of 300 Members New Members 200 ❑ Existing Members 100- 0- CD 0000 0 0 0 0. o 75 K71 CL U O (D O N �- O =3-- Q N O Z D -D L_ Q 7 Month/Year 23. TABLE 2 PERCENT INCREASE OF CLUB MEMBERSHIPS Month Percent Increase July - August, 1990 73% August - September, 1990 15% September - October, 1990 16% October - November, 1990 5% November — December, 1990 3% December - January, 1991 8% January - February, 1991 6% February - March, 1991 9% March - April, 1991 * 7% April - May, 1991 * 7% May - June, 1991 * 7% * Monthly Projections During the next fiscal year, our goal is to obtain a constant membership population of approximately 750 - 800 members which will be obtained through ongoing marketing strategies and consistent, positive and creative programming. Attrition Rate Since opening, we have experienced an attrition rate of 11 percent. According to the 1990 IRSA ( IRSA: The Association of Quality Clubs) Gallop Survey, an attrition rate of 37 percent is an average for the health Clubs surveyed across the nation. We have interviewed each member that has terminated their Club membership and have found that the majority have cancelled because of job relocation, personal reasons (medical, financial or family issues) , and changes in work schedule. Not one former member has cancelled because of dissatisfaction with the Club, the staff or the programs . Many expressed that although they were unable to utilize the facility at this time, they would like to rejoin when their personal situation improved. . • • • • - - -• - • • - -0 - • • • M�\MMN RE \\�\ \10 �\\\M\�\ \10 \ \ \ ON `\ \ \ \ \ \ \ \ \ \ \ \ \olml \ \ 25. Some members comments appear below to demonstrate their feelings about the facility. "You 'will see me at the Club every day - right through the Holidays and into next year. I 've been a member since the Club opened last July and I 'm really proud of myself for my consistency at the Club so far" . Lt. Tom Moore Sheriff ' s Department "My goal for next year is to increase the days I workout: at the Club from 4 days to 5 days a week and to finish the Club' s exercise challenge, 'Race Across America' . Since I began working out at the Club, my work is more enjoyable and it enables " me to have a healthy break in the middle of the day. " Pat Farrell, Senior Inspector District Attorney's Office "I will continue to keep up with my workouts at the Club into the New Year. I have to' get up so many times during the night on emergency calls at Station 6 that I 'm beginning to feel like an old man. Working out at the Club after all night shifts really invigorates me and helps me feel younger. " Ed Kissick, Firefighter. Station 6, Consolidated Fire District "It' s my sanity. If I didn't have the Club, I 'd go crazy. It' s a great stress reliever, par none. It' s nice to go to the Club and just workout with other County employees . I 'm already seeing major changes in my health within the last 6 weeks since the' Club has been open. It' s wonderful ! " Yvonne Armstrong, Secretary Personnel Department 26. "Prior to joining the Contra Costa Club, my doctor recommended that unless I began a consistent exercise regime, he would need to operate on my knee again. With the suggestion of my doctor and the exercise program developed by the Club staff, I have been able to strengthen the muscles around my knee and as a result I will not need surgery. My knees are more stable and I can enjoy other activities such as water skiing and hiking. The Club is a nice break from the work routine, especially when I 'm pumping iron under the careful eyes of the friendly and helpful staff . I will continue to utilize my Club membership. " Craig Loop, Senior Systems Accountant, Auditor-Controller' s Office "The Club is so close and convenient and the staff is exceptionally knowledgeable. in the area of health and fitness . I can't believe how quickly I 've seen results . I feel better about myself and my appearance. I 'm also losing some weight and gaining muscle tone. I feel great! " Richard Terry, Senior Inspector District Attorney' s Office 27. VII . IMPORTANCE OF MEMBERSHIP RETENTION One extremely pertinent factor-that must not be overlooked, is the importance ofmembership retention. The whole premise for phasing in members gradually was to ensure that the population was adequately serviced and satisfied with their fitness progress at the Club rather than to over sell memberships in an attempt to bring in higher revenues earlier. IIn addition, our emphasis is to improve the members ' health status by providing the quality staff and programs that will keep them coming to the Club on a regular basis . As most health clubs realize, nothing contributes more to a fitness center' s success than satisfied clientele. If the members receive good personal service, are satisfied with their fitness progress and feel good about the Club' s staff, equipment and physical environment, they will continue to attend and attract new members . We have established a personal approach to each members ' fitness prescription and personal fitness goals . Consistent monitoring by the staff of all fitness progress results in a sense of satisfaction and , contentment for our members . According to the 1990 IRSA Gallop Survey, the key to membership retention is creating the perception of value for the members in the form of quality programming. Programming is the heart of every successful Club's overall product and it dictates the marketing strategy of the Club. We strive to develop programs to meet the two key challenges in the Club industry. 1 . Motivate people to begin a regular exercise program. This is especially important for those who may have personal doubts of their ability to either beanexerciser at the Club or to change their unhealthy lifestyle. 2 . Support the people after they have decided to begin exercising and again as they face the inevitable obstacles (times, money, boredom, pain, frustration) they run into as they continue their program. As previously indicated, the Club has experienced a 11 percent. attrition rate which is dramatically lower than average attrition rate of 37 percent among health clubs around the U. S. The reasons some clubs may have high attrition rates is due to overachieving in the form of packing in too many members and under-performing in their programming. 28. It is the belief among many fitness experts that the facility, the atmosphere, equipment, etc. and promotional activities initially draw individuals to join a health club. However, once a person becomes a member, the facility loses drawing power, and the programs and staff must take over to dictate membership retention. In addition, it is more cost effective to retain current members than it is to recruit members to take the place of members who have terminated their membership. To encourage . ongoing satisfaction among our membership population, we will try to meet the challenge of membership retention by continuing to offer fresh and exciting new programs and services and to go beyond just enrolling members .into the Club. 29. VIII . FINANCIAL STATUS AND PROJECTIONS A. Background During the initial nine months of operation, we have been able to refine our revenue and expenditure projections based on actual experiences rather than. assumptions . For example: 1 . Overall Expenses: ♦ The term of the lease purchase agreement was amended from '10 to 5 years, thereby, increasing monthly costs . ♦ It was not possible to purchase all necessary equipment outright. The resulting lease costs are therefore higher than planned. ♦ Building occupancy costs were significantly higher than projected. ♦ Other costs such as insurance have been lower than anticipated. 2 . Revenues: ♦ Our membership projections at the nine month mark are on target, however, a six month delay in opening the facility has resulted in a membership lag on the fiscal year basis . The original estimates did not provide for a variable fee structure resulting in a revenue decrease. ♦ Revenue sources such as charging rental for use. of facility space were not anticipated. As a result, we have been able to refine the data to accurately reflect the Club' s current and projected financial status . B. Current Year Projection Compared to the Adjusted Budget for Fiscal Year 1990 - .1991 Roger Edwards., a Principal Accountant from the Auditor's Office, was called in to assist the Club Manager in making adjustments to the current year budget and estimate financial projections for the remainder of FY 1990 - 1991. Following is a summary of the adjustments made and' the subsequent projections as illustrated on Attachments A, B, C and D. 30. , 1 . Expenditure Adjustment Knowing that our revenues will be less than projected in the budget, we have reduced our expenditures from the original estimate to the extent that we could, and still operate .the Club until the end of the fiscal year. The grand total for . the current year projection for expenditures (See Attachment A) is $364,973. Although this figure is higher than the original budgeted expenditures of $314,251, necessary adjustments to the budget included the addition of $123,622 for permanent salaries and employee benefits which were not originally stated. However, the $123,622 in permanent salaries will be reflected as revenue in the form of administrative services. (See Attachment B) . All of the adjustments -made result in an overall $72, 900 decrease in expenditures from the original budget. 2. Revenue Calculation In order to adequately project the Club revenues by year end, a weighted average for membership fees was estimated by taking into consideration the break down of membership types (as seen in Chapter VI) and the different percentages associated with the methods of . payment as indicated below: County Members 80% Pay Monthly 20% Pay In Advance of Which 20% Pay 3 Months in Advance 45% Pay 6 Months in Advance 35% Pay 1 Year in Advance Non-County Members 56% Pay Monthly 44% Pay In Advance of Which 69% Pay 6 Months in Advance 31% Pay 1 Year in Advance In addition, a 7 percent increase in memberships per month were projected until the end of FY 1990 - 1991 to reflect a total membership population of approximately 570 members . The weighted average of $34 .25 per month multiplied by the number of estimated new members resulted in an approximate estimate of additional revenue until year end. The total projected revenue for FY 1990 - 1991 is $292,834 which reflects a difference of $21,417 from the original budget revenue amount of $314,251 (See Attachment B) . 31, 3.. Net County Costs As illustrated in Attachment C, the projected net cost for FY 1990 1991 will be $72, 139 which represents a cost of only 20 percent of the total expenditures needed to operate the facility. 4 . Break-Even Projections Our estimates indicate that we will reach a monthly break-even point when our membership population reaches 650 members . With our upcoming marketing strategies, we expect to reach a membership population of 650 members by September, 1991.. Increasing revenues beyond that point will be utilized to pay back the costs incurred during FY 1990 - . 1991 . Most small businesses fail during the first years of operation due to lack of capitalization. Like any other small business operation, the Contra Costa Club requires significant capitalization to succeed and sufficient time to become a self-sustaining entity. In order to minimize the length of time required to pay back the County, we recommend that the following steps be taken to increase the Club revenues : 1 . Intensify the marketing strategies in. an effort to increase the membership population.. 2 . Develop programs that will bring in additional revenues in the form of services rendered by the Club staff and rental of Club space for special programs . These areas are outlined in the following two chapters . In addition, we recommend that the renovation of the Club' s second floor is absolutely necessary in order to adequately service the growing membership population resulting from intensified marketing. All of the free weight equipment will be moved to the second floor which will free up space on the first floor for additional cardiovascular equipment. Currently, we are experiencing times during the day when the facility becomes crowded and specific equipment becomes heavily utilized. An expansion will enable us to attract additional members, satisfy our current membership and increase our revenues . ATTACHMENT A 32. 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I v t t .••t .••t r+ -4 e-t O V e--t 1-4 'r .-t .-t .••I -4 r" e 4 -4 -4 1-1 t -4 -4 O X C I L r-I 1-1 r-I r\ r` .-tr- r, r\ r` r- r, r, r� r- r` r- r- r` r` P, 1 V w 7 ! to r0 Co 0 0 0 0 0 •� O O Co O O O O O O O O O O O O O •• .-. Ct 4-t 1 +j t0 LO LO to to to to Q N to to tt•) to to u") to Lo to L) to tr) to to to CL O '7 C 1 C to et . r- -4 rt rt .- ••- rt . t -4 14 rr O 10 n ^ nr, r- r, r� nr\ nr- nr\ r\tU O t0 L 4- U 0 0 0 0 0 0 1- O O O O O O 0 0 0 0 0 0 0 O O y 33. Attachment A (continued) Ioo O v O t0 M O �Zr 01 1 O r\ I v r1 It It N r iJ tU 1 1 I 11 11 Cn C U +-1 I O t0 O N 4 O t0 In ON 1 O v C E N I N O 01 o In rt O n 01 O f .•+ O t0 1 In v L 4- 7 I 1 1 II 11 CL CO j M 1 1 I 11 II I f\ O a to O N t0 O O1 O M M I -1 t0 N N 1 t0 N it N 11 1 �r O t0 r1 O In N O 1\ 00 to M 1 --:r f\ O a 1 M N 11 N 11 v •C I n o0 01 Ill M C1' N N r1 M n I .•+ OO O O I t0 n 11 n 11 w w w .. .. .. w .. 1 w .. .� w l w w 11 w II C E 4J v I 01 t0 N M r1 rl to v N ( M In Ol 01 1 1 0 O tl O 11 O ro 0 7 "C I v.-r .--1 1.y v 1 1--1 to I to it .� to 4- .,� toIV I I 1 II 11 L 1 n t0 to CO cr r1 O 1••1 cT I MCt N 1 t0 M 11 M II (aC I M .--1 n N 00 'd' M 1 -4 n � 1 1••I 1.- 11 1- II v 0 n O to N O O 1 '••i II II O 1 M NGo CI• to 1 In t0 Cn I to -T It a 11 00 41 U O \ I qr f'+ I O I 1--1 t0 11 t0 II .-+ C v N 1 e--1 i N I M 11 M 11 -.3 CA 1 I 1 n u 0 to c i i i i ii ii ZI ca- OUI I I ii ii W 4- 1 .-•1 r O N t0 O n M I O r1 to 1 t0 O II O II +� O 1 M N 1--1 M r1 N N CO I O � n 1 1••1 IO II t0 II ro I CO n .••1 ct I r1 N n I O W II O II +J •0 CA .--1 I w w w 1 w w w I w w II w 11 .-. C I ro 0. 1 O1 to M I n M M I M to II to 11 Mw 0 \ 1 01 a II it11 .+ i •1 N+ 1 I r1 I N II N I` f ro r. I 1 1 11 If C L C \ I 1 I u u U N M U 1 1 I If 11 . >1 to I 1 I It 11 .1J 4- I n n CO I 00 O 1\ 1 f\ O 11 O 11 v O I 01 N CO I Cn ON t0 I to W II CO 11 IT r•1 1 � rr I Ol O '7 I to n 11 1\ 11 •0 01 +J ^C Cn r1 1 w w i w w 1 w w II w 11 Cn r1 I N N I N n 11 n 11 O .a O r1 N - ro \ 1 1 r1 1 N 11 N 11 Ol r1 L L r- N 1 1 1 II 11 iJ '-q Ol v t v ro e•-1 I 1 1 11 II U N r1 5 CL 7 \ I I 1 II II •o VI L U 1 I 1 11 11 O 7 to ro 1 I 1 11 II L •0 v Q U I T L "I O O O 0 0 0 0 0 O O 1 -Cr %0 %0 ro I "Ln 1•+ 11 rto1 11 ro o00 0 0 0 0 0 0 0 In r` r\1 I � a u L 1U 13 I O tb O to 1t O N O O to I M 00 00 I n N II N 11 to v m S� v +-1 r1 I - w w w w w w w 1 w w w 1 w 11 w Il v L U 4J v Cn' 1 O t0 .-+ N to O 1•+ O rt N I CO In In I rt II d' II >> ++ N +-1 VI C7 I I N .•+ 04 .+ N 1 N rl r1 I M r1 II 1••1 II 1 N I M 11• M 11 O 4- v •'7 3 Cn 1 I 1 II II C +J L •C .a 01 1 I 1 II II v v L to r1 I I 1 11 If L L O I I 1 II ti L v +J U I I 1 II 11 V ro L 1 O r+ M 0% .--1 r1 O I 00 1 CO 11 CO II Q O I t0 M n O O1 Ol O I to I to It to II O 4- r- O I t0 O � O O -4 1 a I V 11 � II 1 •• I w 11 w II U i-. ro M I .-� N r1 I t0 1 t0 II t0 II M +1 I I N I M I M II M Is 11 U CO I ro Cn I I I U 0 1 I I ii ii 1 > > v v v X w d I +•+ CON 0 yr .1 U. v N •O 'C 1 yr aci v +L+ avi avi T > 1` E E 1 N d ro C O O ro tU O O +J v v r 1 V •� w 0 n O_ d 0 In V Q +� +1 v. Q 4J E E d 0- C1 171 01 0 1 >1 v C C v v 0 E cc _ C c Q v ++ 1 U 1 O \ v •r 400 10 L C I C 10 v ++ N ro C 0 I ro v E m > w ro VI O a c o f a u ro > c o v c v0 W W t c - v u l c o v COv o v u v o •_ ++ U 1 U COS-v L r- L •r 4+ O U •r r 11 O O -0 to I U C ++ O +J 0 U L C +J d N 7 1 O v 0 0- E H ro a toto M v C •U U I C1 C 7IS C O v 4- 4J t0 C L vii v O L I •C ro 41 = O C 4JCnU s ++ 41 M to Ln I ro v L 0 4J L O CO v is ++ v C 0/ ++ v I .a E L 4J '0 0 M U 'C •r L v 0 L •r 'C Cn CA O N O :I. O rl M O Cr to O 1.0 n 0% v In to O t0 1, CO O O O r•1 .-+ r1 t0 I\ Il 1� C1 O rl t0 M U I N N N K1 nl M M M en Mzr -Cr * L to to to � r• ro 'C i-. t0 1 .N N N N N N N N N N N N N +c ro CO M M it •k J L C O \ 1 \ \ \ \ \ \ \ \ \ \ \ \ \ O L \ \ \ O to Q O +-+ v v +•+ I to In to to to to to to to to to to to O U In In In O -4 F•- C C dA.-+ 1••1 rl .� '•a '-a r1 1-4r l rl 1 r1 .-+ rl O r1 rl rl O n C7 O X •C 1 n n n n i- n 1\ n n n n n n N L n n it M O H L U v 7 1 O O O O O O Cl O O O O O O J w O Cl O J J C O CI +J 1 In In In to In In In In to In to to In Q +J In to In Q Q Z O. L O 'O •r 1 r1 1--1 r1 N 1--1 ri r-1 rl N .-+ .--1 rl rl 1- O N 1•+ 'r+ Q v O t0 C O I f\ n n n n n n O n n f\ O O C L 4- ,a 3 C I O O O O O O O O O O O O O I-- O O O I- H C7 _ ATTACHMENT B , 34. Ol C U +J 1f N I .••� O I co t to 11 O it \ .•� w t._ E U 1 I Ln � I .••� O I N 11 11 O -4 U ro O Of 1 I I .-•t I 11 it \ C to V- 3 I I 1 I 11 II a > I I I I I II I n O 1 M t0 M M 1 O O O I O t\ 11 I N t0 I M m00 N I mct O 1 tO .--� 11 N IV I lz 01 I � 1� h tO 1 f•n Cf O 1 Lo � 11 It It U d +� I ^ ^ 1 ^ ^ I ^ 1 11 ^ 11 C E +1 N 1 r--1 I M M LO ( I � ^-1 N O t0 O N O 1 '"� I v 'N-a 1 M v 1 N II N 11 �.i � •n 7 I v I � 1 1 II 11 > tno i i i i ii ii I I ii ii S... I n O I M to M M I .--t O I O a 11 II to C I N to 1 M to 00 N I tO cf• 1 <7 M 11 M 11 N O I Ol I Ln -�T n tO 1 00 qp II CO II I •• •, I •• ^ ^ •• I •• •• I •• •• II ^ 11 T ++ 4- Ol 1 .•+ Cf I M 00 � M 1 n r-1 � 1 .•� N II N 11 00 41 U O \ I �••1 1 �••+ t7 N I f� 1 Ol II Ol. it C 0) N 1 1 ••-1 r••1 I N I N It N it �. y •n N e+ i I I I It 11 S- 0 ro \ 1 1 I I It II i t M I 1 I I it II U 0. I 1 I I II II U I. .••1 I r+ f- to I N O i O .--1 II e^-1 11 •N O I t.n I to N to I co - tO 1 60 Ol II Ol 11 ro I Ol I Ol to qp 1 M Ol 1 Ol M II Ili 11 +J 'a to e-� I .� 1 ^ I I ^ 11 ^ II i-. C •1 ro Ol 1 I v n M I .--1 I .•-� 11 .-+ 11 M N O \ I. 1 O I .••1 I .� II •••1 II .--1 i +-t .- N I 1 •••+ I .-+ 1 •••1 II .-+ II .•. i I ro .-+ 1 I I I II Ii U M N U I I I I 11 11 >, to I I I I u n +� th- Ito N t0 I co I O 11. 00 11 N O 1 1 Ol M I N _ 1 N 11 N II (31 'O Ol +J 'O to - C 7 I .-. C O_ to Ol I 1 �n .-r I n I r- 0 11 f� II O m O .-•'1 (L) \ I I M I M I M 11 M II all .••t i i .- N 1 I I I II II ++ -0 ON v i 0) ro r+ I I I I 11 11 U W .-+ 7 Q 7 \ 1 1 I I II II N ++ U ++ M 1 1 i I II II •tom N i U 11 0 7 fu 10 1 I 1 1 II II O..•O >l i I 1 •••1 I .--1 O 1 O .••■ 11 -411 ro ro I 1 IP) I IA O I O In 11 u•1 11 i d T3 I I N I N c I O N it N II N L U 41 N Ol 1 1 N I N N I N >, + to +� H O1 1 I 1 .+ 1 r+. I u 1 n Ol C O I 1 M I M I M 11 M 11 +1 O 4- (LI •n 3 Ol I I I I 11 II C +1 i T7 .G Ol I 1 I 1 11 II 0) 0) i ro i � L 7 I 1 I I II II 3 L U ro i I O I O O O I O O I O O II (I II O 1 1 1 to E U') Ln a N O I O r\ II n 11 EO 4- r O ' to ; IA Ol n i tO i .-1 N 11 N II U - to Ol 00 N I N LO +-1 Ol I 1 1 I 11 11 U 00 1 I I I 11 11 ro Ol 1 I 1 I 11 II I I I I 11 11 I cn I N tU I 7 � 1 C d 1 0) Q >N > a) 1 E UE to to c a) I i-+ CO .c U U O i +-t 1 H rL H > > I N H i to to ++ N O) ++ 1 > 0) ro r O. .--1 a I t- U E 7 > O (0 i C ro 1 N r O X ++ 7 1 C 4- E U +� ro N U 1 to ++ O O L t i it U 4J L to I i N O1 C to r r H 7 U 0 7 1 4J C. C O N U L •r C •� C 1C O •r U I N i C 41 L U > 4J U I a i C > ++ H E W to to ro I 1] ro 0) i t � 'O i 0 •� 41 I 3 .0 d i OJ L •E ro i E N N N O 41 1 U >l.-1 �r In tO r- 7 In Ln U to •U 1 N 00 4m i ct V f- O tO n M U U 1 to c .•+ -4 O 00 -00 00 U ON Ol is -4 ro 7 to 1 4J O M ON •K 4- ON ON tT 1t C ON Ol Itis J S- C O \ 1 H E \ \ O - \ \ \ O to \ \ O Ln Q O +1 0 O to to O N to to to O r LO to O -4 H C C > 1 U 4- 1-0r-t � -t -40) rt .-+ tO -4 r-t t)0 f\ O O 4) •C I O n n Ol O)1, n f- Ol 0) n n ON O H 4J t.) i 7 I ro (D O i 0 C) O U Cl O S- i N J to J w J J p O •• IT 41 1 +j h to to Q L in In to Q to to Q Q Z 0- i O 1 C 7 .-+ '••t F- U .-+ .--1 .-+ F- E N —4 U O lO 3 C O I O n I� O n r\ O n f� O O i 4- O O F- O O O F- O O F- H CD 35. ATTACHMENT C I I N N 00 a u •t r1 H i O1 C U + 1 1D -4 (" •+ 1 1ttb -o O O 6o O t0 n 6 () C E O) 1 to to 0 ( too .--4 .-+ Ol O .n O to O n u t6 OL 'O v v� S v a to .a I 1 > I N to f\ r- CO to I 0) l,o tD en Cf In O O I N 00 —-cr to I M M -4 rl N to f- O %0 N I t0 to th I tt tO to N- LO M r1 C E ++ w I M O N I O tD N f'n O t0 O H O 1 N co I 0� u L 4L• > 10 I 1 1 L 1 N LO n --:r f- cn I ct co to f� a LO 00 m C I N 1-4 CO .••! 01 1 -cr M 1••4 N to 0) O 1-+ i co lzl cY to O N N co - cn qr >, ++ 4- cn 1 en cn .-+ 1 C7 N V' W 41 C U O N I 1•+ r~ 1 . v L O m I I L L co I I U 1 1 N 4- I rl n --zr 01 CT I CF -�r 'cY 1 0% qr N ++ O 1 M LO 00 tO I 'a .N a LO O N .••� H ri j N LO 00 f\ O T M cn M d O ro \ 1 cn rt 1 (nO L I to .N-� 1 1 3 L 3 \ 1 I CO I I >1 I 1 4J 4- 1 "f- co O N O I LO Ol N O N O 1 Ol %0 LO 1N en Nr- cm.-+ 1 O m 1--1 1 N LO to CA I O I N - O .Q cn r~ L •L r N 4-1 L CL 0) 1.'to T L I O tO to LO 1 tri O O O v O Cl O 10 rt I ON to' LOI v O� O ct c0 to 0 0 L r- 41 -0 •0 I O 00 to M N f� M M N .00 U >' 4J N Cn 1 O M I a LO N >' 4' - rn c � a'o i to i to 41 O 4- .� a� rn I aci +' N L R 1 1 L N +-•1 U a O I I co E 4- 1 I tD .•. '•+ .00 •ucn rt m I I tn 0) I +CA + 0, A Ocx N m to O! cm a +1 I C •L C N to C r +-1. N CL C U.•-. I d ^ L •r C 41 V to C v I v a� c v a= t L a c 1 t0 > c ' O X E 10 to oa to O a C E E Ol 0 O • N. to G C - O I N' O •r +; O U I f1 4- L 4-3 E x T U C C >1 h N 0 U w O •Q_ m 1 L N e0 m N t0 O to N CL•�- O ++ d 7 H I 4J C to L C L w I r t0 ++ I C w O to U d N V to 7 M•r r- L.. U U to I w .a E c3- E • E Y Q.•r _bc E w r O O I L E L •r N L Cl 4- O E — M C •o O t0 U 1 w w wC O o 4- 0 0 W ++ E w O +i Q 4- 3 3 M O .0 V ++ 3 0 E E 4- 0 +j +r 1 U N r+ M cr N M O •O O N Cl 1-+ O O 14 O O U C U I -4 1••+ to n C O O 1•y rt N M M -cr to M 7 - V I t0 ca•Co Cl O O O O 'r0 -4 1•4 4 -4 r+ -4 N 1••4 .--� b O - to I +J -4 .-+ '•+ 1•-4 1•4 -4 'K N N N N (\j N N N N L' U O \ I NN \ \ \ \ \ \ O44 \ \ \ \ \ \ \ \ \ 0 +j- v +� I O 0) U") LO U') to tO LO O0 LO LO to LO LO LO LO LO to C C +1 rl -4 rt r-i rl rl 1•-4 .-•+ 1--4 O w C 1 L f, fes' n fn f- f- f� f- f, U C 7 1 r0 Cl 0 0 0 0 0 .J •> Cl Cl 0 Cl 0 0 Cl O O O a1 +1 LO LO to'In LO U") Q 0 to LO to LO to LO to LO to G L O7 C ut 1--1 .-+ 1-•t .-r .•� .� F- h 1--1 .-y r~ r� -4 .--1 .-4 O O �O C O 1 O L 4- 7 C I U Co 0 0 0 0 Co F- 0 0 0 0 0 0 0 Co O Attachment C (continued) 36. 1 W O H O CO O a O to M O S 0, N O� C U 41I t0 O M O O O N 4 t0 �; Oto, to ON I O O •--� I N \ 4) C E 4) I M O r- O N O M O to H O r, M O I .--• O t0 I LO r 1 l0 CO O O M O r\ O � to O N t0 O Ol O to LO M a' 1 H t0 N N I D I :Zr O H to CO O d• O t0 e-1 O U') N O r` CO 1 COC:) SI M 4) O t0 CO n M O t\ CO Ol 11•f M N Ol f, I .--• CO CO O I t0 a41 O 1 N v v r- Gt M Cl t0 N C H H to v N I M to 0l Ct 1 tO O t0 0 to rT 1 •� v.--• r. -4 1 CV H v 1 H > 1 I 1 L 1 t0 CO O n r- 4n to CO a C) �--� I M Mr N I t0 b C I V LO .� 1•-t -V' M .--� w' n NCO -It M 1 Hr, � I H () O _ I C N CO t0 n O L r- .-+ N 1 N O O 1 H - T 41 4- Ct I N N .-+ cr N CO -C to I to t0 Ot I to CO 41 U C w O N_ I �•-� H I N I H v i •O 10 \ 1 1 1 S- L M t 1 1 1 Q 1 U 1 I I 4) 4- I to O CO .--� �. 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I C fv .LZ > C o C d .-1 I E 7 O ro L � C 1 N r 'C X ' +J 7 1 C 4- E u ++ Co C O O 4- ro "O 4 OCn ro I aLi 01 C N O 3 V O 7 to 1 MC 0 N r 4J I O •� U 1 C C) L V to 1 L C 4J > +W u O I d L C > +J to E 41 to to ro v ! ro v L rt? L a� - J I etS N L y L E 10 N L E o +-1 ++ I In to r� 7 In In U C u 1 w 00 M L qr -zr n O to n M O U I C 1••1 .--1 O CO CO 00 N M (n iI r. to O ro 1 0MON 4- rnrnrn * aCnM L U O \ I E \ \ O \ \ \ O ro \ \ Co LO Q O 4J .� ++ 1 to In O to In to to O r In In O .--1 f- C C ++ 4- 1•+ C1 r•-1 1-1 P4 to r .-r r- Co fl- Cl O v •C I O r- n Gi IT rl r� n Oi N n 1- Oi O F-- L U C 3 1 V O OJ roL O O O J y O O J J C O •• n Q1 +� I -H In In Q L In In In Q In In Q Q Z w --L O 0• I 7 1-1 .. l— U .+ .. .--1 H E r- r--1 C> C—O Q of to 7 C I CD C O C> ID � O C Oix L 4- O O O O O O F-- H Cz O ATTACHMENT D 38• Office of COUNTY AUDITOR-CONTROLLER Contra Costa County Martinez, California April 29, 1991 TO: Phil Batchelor, County Administrator FROM: Kenneth J. Corcoran, County Auditor-Controller by: RWeL card Principal Accountant SUBJECT: County Health Club Enterprise fund At the request of your office, we have assisted the health club staff in analyzing and interpreting the financial reports for the Contra Costa County Health Club Enterprise fund through March 1991. We also assisted in developing the procedures and techniques necessary to project the anticipated revenue and expenditure activity for the balance of fiscal year 1990-91. We have reviewed the resulting financial projection and believe that the projected year end deficit resulting from current year operations of approximately $72,000 is a reasonable estimate based on year-to-date and proposed activity. Combined with the 1989-90 deficit balance the 1990-91 ending negative fund balance is . estimated at approximately $ 97,000. California Government Code Section 30200 provides for the Accounting Standards and Procedures for counties. Chapter 13 of the AS&P provides two acceptable methods for correcting profit/loss situations for enterprise funds: 1. Adjust user charges or fee for service rates. 2. Transfer appropriations from appropriate funds. (i .e. County Subsidy) These actions may extend beyond one year if a plan acceptable to the County Auditor is followed. We are currently working with the health club staff and your office to establish guidelines which will provide for continued monthly status reports to your office. 39 IX. CURRENT PLANS TO INCREASE MEMBERSHIP - MARKETING STRATEGIES Current and upcoming marketing strategies aimed at increasing Club memberships are discussed in this section. Most of these marketing programs have correlated with -the phase-in approach for accepting memberships. UPDATE ON PAST MARKETING STRATEGIES 1 . Pre-Opening Phase; January 1990 - June 1990 During_ the 6 months prior to the opening of the Club, numerous flyers, memos, questionnaires and preliminary membership application materials were distributed to County employees through the payroll system and the, Wellness distribution network. Club information was also posted in display areas at various worksite locations throughout the County. In addition, Club information was included in the benefits packages distributed to all new employees -and handed out at new employee orientations conducted by the County Administrator' s Office. 2 . Opening Phase: . June, 1990 - August 1990 The Grand Opening of . the Club was advertised by utilizing the following resources.: ♦ An Open House was held for all County Supervisors, the County Administrator, County Department Heads, Managers of local businesses, the Mayor of the City of Martinez and his council members and other dignitaries . ♦ Posters and flyers highlighting the Open House week were distributed and posted in various worksite locations throughout the County. ♦ -A quarter° page - ad - was included in the Martinez News Gazette inviting all those interested to preview the Club. ♦ Several articles highlighting the facility had also been published in the Martinez News Gazette. 3'. Phase I : September, 1990 - December 1990 ♦ September, 1990 - October, 1990, The Club distributed its first quarterly newsletter to all County employees through the payroll system. The newsletter announced the opening of memberships to dependents and spouses of County employees and highlighted the Club features, membership fees and dues . 40. 3 . Phase I : September, 1990 - December 1990 (continued) Membership information was distributed to interested corporations , and local businesses announcing the . availability of memberships. Club management worked closely with the City of Martinez to advertise the availability of Club memberships to City employees . As a result we have over 20 City of Martinez Club members who have paid for 6 months in advance. The City of Martinez is paying for one-half of each employees ' 6 month membership fees . November, 1990 - December, 1990 A flyer was distributed to County retirees currently residing in the Central Contra Costa County area inviting retirees to join the Contra. Costa Club. Letters were sent to all current Corporate members announcing the availability of memberships for the spouses and dependents of corporate members . 4 . PHASE II : January, 1991 - March, 1991 0 The second Club newsletter was distributed to all County employees through the payroll system that announced the availability of Club memberships" to temporary and contract County employees as well .as the change in the membership contract status . Instead of only offering 6 month membership contracts,. the Club now offers 3 month contracts for those not able to make a 6 month commitment.. 0 Flyers announcing the availability of memberships to temporary and contract employees were distributed to all County payroll .clerks to disperse to the temporary and contract employees. Flyers were distributed to Perfecto Villarreal, the Executive Director of the County Housing Authority, - to disperse to .his employees regarding the availability of memberships . We have worked out an arrangement with the Housing authority which will enable their employees to deduct membership fees from their payroll system similar to the County's system. ♦ Letters were sent to over 200 local businesses to announce that there are still memberships available for corporations . 41 4 . PHASE II : January, 1991 - March, 1991 (continued) ♦ The first edition of the "Health and Fitness Monthly" newsletter was distributed to all Club members in January. A special promotion enabling current members to receive. a Club T-shirt when they sign up a friend was included in the newsletter. ♦ The Club Manager attended March' s Department Head meeting and dispersed 2-Week Free passes to the Contra Costa Club to all Department Heads to utilize themselves or to disperse to individuals in their department. UPCOMING MARKETING STRATEGIES With our limited Club staff, much of their time has been devoted to fine-tuning Club procedures and services and in maintaining a high quality level of programming. However, we have reached a point where we are satisfied with the day-to-day operations and additional staff time can now be devoted to marketing endeavors and membership drives . During the last few months. of FY 1990 - 1991 and into the next fiscal year; our `-marketing- will fall into two categories -- Internal Marketing and External Marketing. Internal Marketing Internal Marketing will attempt to accomplish two goals -- keep the attrition rate low and to acquire new Club memberships through current member referrals . ♦ In April, a "Super Fit Secretaries Week" Program was instituted. During this promotion, current Club members who supervise clericals could present their clerical staff with a 2-Week Free pass at the Club. ♦ In May, the Club will conduct a "We Miss You" promotion in which letters will be sent to members who have not been utilizing the Club . on a regular basis . ♦ In May, we will also conduct a "Membership Appreciation Week" . During this promotion we will have a week long celebration thanking our members and awarding them with guest passes to distribute to their friends and co-workers . 42. ' ♦ Future Internal Marketing will focus on the introduction of new Club programs including additional aerobic classes, clinics on health and fitness, additional exercise competitions and contests, Family Day promotions, a Health and Fitness Video Resource Library and a 1-year Anniversary Party in July. As previously stated, all Club programs and activities, . current and future, are . designed to encourage our members to keep up with their exercise programs and to provide them with the most up-to-date information on health and fitness . External Marketing External Marketing focuses on all of the promotions and activities developed to acquire new memberships within the County itself and throughout the businesses in the greater Martinez area. ♦ An aggressive Marketing campaign aimed at one of the larger employers in Martinez, Shell Oil Company, during the last couple of months has paid off and a Corporate Account with them has been established. During the end of April, the Club will conduct the "Shell Oil Week" promotion. The Shell Recreation Association has promoted this promotion throughout the company and all interested Shell employees will be allowed to visit the Club and receive special Club tours . We anticipate obtaining over 20• memberships from Shell before June. Plans are also underway to conduct a similar program to the City of Martinez employees in an attempt to increase the number of City of Martinez memberships . ♦ The Club Manager will present a special Club promotional seminar to the Public Works Department in May and plans are underway to visit other department staff meetings to increase the County awareness of. our Club and the programs we offer. ♦ A Marketing Consultant has recently been hired on a . commission basis ,to focus .on selling Club memberships to local businesses . To date, the Club has not been as effective in obtaining new memberships from local businesses as originally expected due to lack of staff time needed to go out and market to these businesses in person. ♦ Current marketing promotional materials including flyers and brochures highlighting new programs and services will be distributed to County employees through the payroll system and the Wellness network We will continue to provide Club informational materials in new .employee packets and articles in County newsletters will continue to be heavily utilized. Formal Club promotional displays will also be placed in County worksite locations in the next several months . 43. X. RECOMMENDATIONS FOR FUTURE PROGRAMMING The future success of 'the Contra -Costa Club relates directly in our ability to provide beneficial programs, in conjunction with other County departments, programs and services,, to create a balanced health and wellness facility. In order to accomplish this goal, the Club needs the support and commitment from the County Administration and the Board of Supervisors . In addition, we need the support of the Department Heads to allow their employees the ability to flex their work schedules. This will ease overcrowding during our peak hours and enable us to adequately service additional members . Recommendations : The following recommendations involve offering programs that are either currently being conducted by other County departments or are programs to be developed with other County departments and services. Several of these programs may bring in additional Club revenues . 1. Host special educational programs at the Club that will be open to, non-members and members alike. Ideas for future programs include: ♦ Working with' Risk Management to conduct CPR classes in our' aerobics room. ♦ Coordinate special health . education programs and screenings working with programs such as CCHP and the County Prevention Program. ♦ Continuing to conduct health screenings, health and fitness seminars, exercise competitions and other Wellness Program activities . 2 . Develop comprehensive preventative and rehabilitative programs to. include: ♦ Conducting specific fitness programs especially designed for County employees who are in the process of rehabilitation from injuries incurred at work. Renting Club space to a physical therapist will be considered as part of this program. ♦ Develop and conduct back training programs especially for employees with physically demanding jobs . ♦ Develop and conduct VDT fitness classes similar to the program conducted by AT&T's Fitness Program. These classes will be designed to help combat the escalating cases and subsequent costs to the County of conditions such as carpal tunnel syndrome. 44. 3 . Develop Fitness Testing Evaluation Programs for Specific Departments : ♦ Plans are currently underway to conduct fitness testing evaluations at the Club for all of the new Sheriff recruits by the Club professional staff. This program will hopefully encompass additional fitness testing standards and evaluations for other sectors in the Sheriff ' s Department. If this program proves successful, there may be a possibility to develop similar programs for the City of Martinez Police Department. 4 . Acknowledging and rewarding employees for making a commitment to be healthier County employees . ♦ Currently, the County monetarily supports the County employees by rewarding them for longevity at the County in the form of Services Awards and more recently rewarding them for performance in the form of the Awards of Excellence Program. However, we feel that the County needs to additionally reward employees for their good health,, possibly by awarding employees Club memberships as alternate awards for the Awards of Excellence Program. Currently,. the City of Martinez subsidizes half of the .Club membership fees for their employees . If the County assisted their employees pay a portion of the membership fees, there would be a greater number of employees utilizing "the Club and in turn. 'a larger percentage of: healthier_ and more productive employees . As evidenced by numerous cost-benefits analysis in Chapter II, a company fitness program will do much more than just pay for p itself in the long run. 45. XI . REFERENCES American Heart Association. .( 1984) . Heart At Work: Exercise Program. Dallas, TX: Author Baum, William, Bernacki, Edward and Tsai, Shan. (January, 1986) . "A preliminary investigation: Effect of a corporate fitness program on absenteeism and health care cost. " Journal of Occupational Medicine, 28, 18-22, January. Bernacki, Edward and Baun, William. (July, 1984 ) . "The relationship of job performance to exercise adherence in a corporate fitness program. " Journal of Occupational Medicine, 26, 529-531 . Bernacki, Edward. (April, 1987) . "Can corporate fitness programs be justified?" Fitness in Business, 1, 173-179 . Blair, Steven, et al. (November 3, 1989) . "Physical fitness and all-cause mortality: A prospective study of healthy men and women. " Journal of the American Medical Association, 262, . 2395-2401 . Fitness Systems . ( 1990) . "The Economic Impact of Employee Health and Fitness . " Gettman, L.R. (August, 1986) . "Cost/benefit analysis of a corporate fitness program. " Fitness in Business, 1, 11 - 17 . Hatziandreu, Evridiki, et al. (November, 1988) . "A . cost-effectiveness analysis of exercise as a . health promotion activity. " American Journal of Public Health, 78, " . 1417-1421 . Health Care Financing Administration and Economic Report of the Presidents . ( 1989) . Subcommittee on Education and Health. Joint Economic Committee, Congress of the United States . 46. . . IRSA: The Association of Quality Clubs ( 1990) . 111990 IRSA - Gallop Study: Profiles of Success . " Patton, Robert W, Grantham W.C. , Gerson, R.F. , Gettman, L.R. . ( 1989) . Developing and Managing Health/Fitness Facilities . Champaign, Illinois : Human Kinetics Books . Ostwald, Sharon. ( 1986) . "Cost-Benefit Analysis : A framework for evaluating corporate health promotion programs . "' AAOHN Journal, 34 , 377-382 . Shepard, R.J. ( 1983) . "Employee health and fitness" The state of the art. " Preventive Medicine, 12, 644-653 . Shepard, R.J. ( 1986) . Economic Benefits of Enhanced Fitness . Champaign, Illinois : . Human Kinetics Books . Shepard, R.J. ( 1987 ) . Fitness and Health In Industry. New York: Karger. Sjoberg, Hans . ( 1983) . "Physical fitness and mental performance during and after work. " Ergonomics, 23, 977-987 . 47. XII . ADDENDUM Contra Costa Club Member Suggestions ♦ The place looks great since my return from the war you are to be complimented. Toiletries are a nice touch. ♦ I love this place! Keep up the good work. ♦ How about a massage therapist. An independent professional could be hired and appointments made. Thanks, you are doing a superb job! ♦ Keep up the good work. ♦ Thank you for keeping the locker room so clean. I sure appreciate it. ♦ Thanks for clocks by the sauna and the hair dryers . ♦ Thanks for the hair dryers . ♦ Staff is very helpful,, keep up the good work. ♦ I have to admit that when I joined, I was skeptical that such a small gym would satisfy me, but this is a great gym. The razors, aftershave, etc. are a great idea. ♦ Thanks ! ♦ Now we have hair dryers . Thanks . ♦ You are doing a GREAT job! ♦ Hair dryers --nice touch! ♦ Thank you all for all of little frills you added. It makes it very nice. ♦ All the condiments are "great" . ♦ Jane, one of the aerobic instructors, is the best thing that this Club has to offer. ♦ This area and the Club is nice and clean. ♦ It ' s nice to know you' re listening. Thanks for the goodies by the sink! ♦ Be open on Sunday. ♦ Stretch and tone classes . 40. ♦ What about getting shorts as well as the shirts available with the Club logo for people to buy? You could also have socks, etc. . for sale. It would be nice for when we forget to bring something, to be able. to buy it here. ♦ On County holidays be open a few hours. in the morning. ♦ It would be nice to have a squirt bottle and towel by the stairmaster. ♦ Another Stairmaster! ♦ Club shirts for sale. ♦ How about a fourth 6 : 15 a.m. aerobic class per week?