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Home My WebLink AboutIR 7662 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7662 To the Mayor and Members of the City Council November 24, 1992 Subject: MCLELAND TENNIS CENTER CONTRACT Background On October 20, 1992, the City Council took action to deny the proposed management contract with Peter Brown to operate the McLeland Tennis Center. The proposed three (3) year contract (with two (2) one year options) would have required the contractor to operate the facility a minimum of 63 hours per week, 7 days per week including provision of personnel resources, day-to-day management, pro shop, concessions, leagues, tournaments and lesson services. In turn, the City was to fund utilities and facility maintenance totalling $30,031 per year. All revenues were to be retained by the contractor, except court rental fees, of which an escalating return of gross fees would be paid to the City in years 2 (590) and 3 (10%) and option years 4 (15%) and 5 (20%). Operating and Funding History During fiscal years 89-90 and 90-91, the City operated the facility on a full service basis including pro shop/concession services 95 hours per week As a result of budget reductions in FY 91-92, pro shop/concession sales were discontinued and weekly operational hours were reduced to 63 including the implementation of midday (noon-5:00 p.m.) closures on weekdays. The following provides an operating summary for these 3 years. FY 89-90 FY 90-91 FY 91-92 Revenue $ 23,860 $ 39,792 $ 41,029 Expenditures 103,754 93,394 60,006 Subsidy 79,894 53,602 18,977 Staffing 2 full-time 2 full-time 1 full-time 4 part time 3 part-time 3 part-time Hours 95 95 63 Operation Full Service Full Service Eliminated Pro Shop; Reduced hours including Ai!Lda CIO ,sings V OFFICIAL RECORD CITY SECRETARY ISSUED BY THE CITY MANAGER INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7662 doTEA,_ To the Mayor and Members the City C November 24, 1992 oph, emers o Council Page 2 of 4 Subject: MCLELAND TENNIS CENTER CONTRACT van Issues During the October 2Dth briefing the City Council raised the following issues. Staff findings and/or observations accompany each of the issues raised. 1. The Fort Worth Tennis Association (FWTA) was not invited to respond to the second Request For Proposal (RFP). Review of records has determined that the FWTA did receive, along with 16 others, an invitation to bid; however, failed to submit a proposal by the closing date. 2. A meeting should be held with representatives of the FWTA and Peter Brown to explore alternatives for management of the center. A meeting was held on October 29, 1992 at which the FWTA requested that they be withdrawn from further consideration to operate the facility and instead recommended the City renew negotiations with Peter Brown. 3. Under the proposed contract, the manager will be able to monopolize the use of the indoor courts for lessons. Through negotiations with the FWTA and Peter Brown, a contract term allowing the public to make indoor court reservations six (6) days in advance and restricting the contract manager to making reservations 24 hours in advance has been identified. 4. In the proposed contract all gross revenues for pro shop/concession sales, tournaments,,leagues and lessons are retained by the contractor. The City should receive some return from these activities. At the Departments request the FWTA conducted a survey to determine percentage of gross revenues retained by private contractors. The survey determined that cities retain between 0-5% of pro shop sales, 0-10% of lesson fees, 0-80% of tournament fees, 0-95% of league fees and 5-100% of court fees. As a result, major variations were identified in court, league and tournament fees while consistencies were determined in pro shop sales and lesson fees. Given the above, staff would recommend exploring the potential for renegotiating fees per the listing below. OFFICIAL RECORD CITY SECRETARY FT WORTH, TEX. wt JK I rl IF ISSUED BY THE CITY MANAGER UK; ' INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7662 .Opp, To the Mayor and Members of the City Council November 24, 1992 Page 3 of 4 Subject: MCLELAND TENNIS CENTER CONTRACT Previous Contract Proposed Contract Year 1-0%, Year 2-5% No Change Court Fees Year 3-10% Option Year 4-15% Option Year 5-20% 0% Years 1-3 0% Pro Shop Sales Option Year 4-3% Option Year 5-5% 0% Years 1-3 0% Lessons Option Year 4-59x0 Option Year 5-10% 0% Years 1-3 0% Leagues Option Year 4-5% ooib Option Year 5-10% 0% Years 1-3 0% Tournaments Option Year 4-55ro Option Year 5-10% Given the likelihood of marginal profitability in the initial years of the contract, the above escalating rates of return in option years 4 and 5 would allow both the contractor and the City a reasonable assessment period. Should the operation prove successful within the initial term of the contract then adjustments could be invoked during the optional terms. Management Comparisons Staff has identified two options for future management of the tennis center including management by contract and management by the City. The latter would continue at FY 91-92 funding levels (with adjustments for inflation) and provide minimal service levels, i.e.,no pro shop/concession services nor clinics and midday closures. While the subsidy would be higher under the contract management option, services would be provided at increased levels. For comparison purposes, funding levels necessary to meet contract 00,1 11 service levels are also provided. BURL RECORD Nff SECRETARY —ISSUED BY THE CITY MANAGER FL&M&U-- INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7662 ��c.AOT14'ro fop To the Mayor and Members of the City Council November 24, 1992 Page 4 of 4 AMD x Subject: MCLELAND TENNIS CENTER CONTRACT City Managed Contract City Compared at FY 91-92 to Contract Levels Revenue $41,029 $ 12 $ 54,000 Expenditures 60,006 30,031 97,810 Subsidy 18,977 30,019 43,810 Stiffing 1 full-time 1 full-time 1 full-time 3 part-time 3 part-time 3 part-time Hours 63 Minimum of 63 63 Operations No Pro Shop/ All including All including Concession Pro Shop/ Pro Shop/ No Clinics Concession Concession Midday 3 free public 3 free public Closures clinics per year clinics per year. 1 free clinic per 1 free clinic per summer for the summer for the Recreation Recreation Centers Centers The $13,791 difference in subsidy between contract management and City operated at contract management levels makes City operation at this level financially less attractive. The $11,042 difference in subsidy between contract management and City operated at reduced (FY 91-92) service levels reflects the increased service levels including reopening of the pro shop and provision of the four free clinics per year. Recommendation Given that contract management will provide increased service levels for the operation of the tennis center at less cost than if provided by the City, it is recommended that the City Council reconsider entering into a management contract with Peter Brown. If accepted, staff will prepare a revised contract under the terms and conditions as listed here" C" KCRUI B T Vy L MY SECRUARY City Manager Attachment FT. WORTH, T11 -ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS Fort Worth Tennis Association P. 0. Box 101595 Fort Worth, Texas 76185 31 October 1992 Mr.Richard Zavala Park&Recreation Director 100 North University Suite 239 Fort Worth,TX 76107 Dear Richard: It is our understanding that a proposal to provide management for the McLeland Tennis Center has been submitted by Peter Brown to the City of Fort Worth. Although the Fort Worth Tennis Association does not know the exact details of the proposal,we whole-heartedly support the efforts of Peter. To clear the confusion concerning our initial proposal,the Fort Worth Tennis Association does not have the re- sources to fully privatize a quality facility such As McLeland. Our function is to lend support to the tennis playing public and to provide functions to help the sport of tennis grow in Fort Worth and the state of Texas. Another ,00►inction we provide but has not been utilized is one of advisor to any organization whether it be the City of Fort Borth, the Park and Recreation department,the head pro at a public or private facility,or the coach at any Fort Worth school. Our board is composed of tennis enthusiasts from different occupations soley interested in the sport of tennis. Therefore in relation to McLeland,our main concem is to keep McUland open to the public and to return to the level of service required to run a class facility. Without McLeland there is not a facility in the city conducive to provide leagues,tournaments,clinics and other functions. These functions include the four"major zone" tourna- ments awarded to the Fort Worth Tennis Association by the Texas Tennis Association. Furthermore, the condition of the tennis courts at local high schools and public parks(the exception being Arlington Heights) is not conducive to hosting tournaments or dual matches at the high school level. Therefore,the Fort Worth Tennis Association is in favor of a plan to provide quality service to the tennis playing citizens of Fort Worth by a qualified individual. We know Peter from his dealings with Lake Country and we have always found him to be a conscientious and hard-working individual. We feel that we could recommend Peter as manager and tennis professional for McLeland Tennis Center. Sincerely, ;a am RECORD My1pn Krueg RY /0 r 01 MRITARY Pfesi dent 'N_ Fort Worth Terink Awwinfion FT. WORTH, TEL