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HomeMy WebLinkAboutIR 8935INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8935 The purpose of this Informal Report is to outline the process for the renewal of the management and operations contract with the Fort Worth Zoological Association for the management of the Fort Worth Zoo. The current contract [City Secretary Contract No. 18454, as amended], which was authorized in 1991, has a twenty [20] year initial term with unlimited successive ten [10] year renewal periods by mutual agreement. The initial term of the contract is scheduled to expire on May 14, 2011. The Fort Worth Zoological Association has expressed its desire to renew the contract prior to the completion of the initial term, primarily to address long term financing requirements for major capital improvements. BACKGROUND: On May 14, 1991 (M &C C- 12867), the City Council authorized a contract with the Fort Worth Zoological Association [FWZA] to manage the operation and development of the Zoo. The 20 -year agreement authorized the FWZA to fund and manage all operations and improvements, and to retain all revenues. On September 27, 1994 (M &C C- 14490), the City Council authorized the execution of the first amendment to the contract which allowed the FWZA to operate, maintain and manage the existing main Zoo parking lot and areas to the north of the Zoo known as the Archery Range and Colonial North. On November 17, 1998 (M &C C- 17141), the City Council authorized the execution of the second amendment to the contract which allowed the FWZA to manage the design and development of capital improvements at the Zoo funded in the 1998 Capital Improvement Program. On March 27, 2001 (M &C C- 18527), the City Council authorized the execution of the third amendment to the contract which increased the annual payment to the Fort Worth Zoological Association by a total of $1,445,755 over a four year period, with 25% added each year beginning in April 2001. This restored the funding level to the original contract intent. The amendment also allowed the City to make direct payments to the Zoo instead of a subsidy, waived personnel cost overruns owed to the City, transferred authorized positions from the City to the Zoo, and bought -out accrued leave for those employees. On April 16, 2002 (M &C C -19035 Revised), the City Council authorized the execution of the fourth amendment to the contract to eliminate the Aquarium, Lion Mountain, and the Small Mammal Village capital projects from the 1998 Capital Improvement Program bond funded projects and direct those funds to the demolition of the existing Herpetarium and Aquarium and the construction a new Herpetarium. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8935 To the Mayor and Members of the City Council April 22, 2008 Page 2 of 3 SUBJECT: RENEWAL OF ZOO MANAGEMENT CONTRACT Since 1991, capital improvements managed and underwritten by the FWZA have totaled an estimated $ 85,313,960; with the completion of the Museum of Living Art, this amount will increase to $101,313,960. In addition to the $3,000,000 allocated in the 1998 CIP and $1,686,040 allocated from the Capital Projects Reserve Fund in 1991 for construction of the main zoo parking lot, the City has funded $1,686,040 in utility improvements which represent the city's cost participation as required under the current contract. Once completed each capital improvement is vested to the City along with an operating endowment. Phase 1 of the Museum of Living Art is currently under construction and is scheduled to open this spring. This $15 million facility will fulfill the agreed upon replacement of the Herpetarium as authorized in the fourth amendment. In FY1991, the City Zoo budget totaled $2,767,530. In FY2008, the City's subsidized portion of the Zoo budget is $5,101,028. [The contract payment is paid in 12 equal monthly installments and annually the contract amount is adjusted according to the Consumer Price Index unadjusted for the Dallas -Fort Worth area]. The annual attendance in FY1991 was 515,000. Since 1992 the Zoo attendance has exceeded one (1) million visitors per year. CONTRACT REVIEW PROCESS Initiation of contract renewal proceedings has been identified in the City's FY2008 Business Plan and initial discussions with the City and Fort Worth Zoological Association began last fall. During the third quarter the schedule and process for review and negotiations will be established and it is anticipated that the recommended renewal terms will be presented to the City Council during the first quarter of FY2009. From a long range financial perspective, the goal of completing the contract renewal, associated terms and the execution thereof, is targeted for the second quarter of FY2009. This will allow for any budgetary adjustments to be incorporated into the development of the FY2010 operating budget. This schedule for review and renewal will precede the end of the originally established May 2011 primary term completion by approximately two [2] years. The initial meeting between the City and Fort Worth Zoological Association to discuss the contract review and negotiations process and the timeline for review, has been tentatively scheduled for May 21, 2008. In an effort to ensure the continuation of an adequate and feasible level of support by the City, negotiations will include the identification of options for increased participation in capital or operating costs or other potential City sponsored support. These options for consideration include the use of gas well lease revenues derived from City -owned park land and the associated mineral rights in and around the Zoo. Other management and operational review and analysis, including the effect of half price admission days on Zoo parking and related traffic, flow will be discussed. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8935 The formal contract review schedule will be provided to the City Council once established by mutual agreement with the Fort Worth Zoological Association. In the interim, should you have any questions regarding this matter please contact Richard Zavala, Parks and Community Services Director at 817 - 871 -5711, or Carl Smart, Acting Assistant City Manager, at 817 - 392 -6183. Dale A. Fis I r, P.E. City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS