HomeMy WebLinkAboutCC AG PKT 2012-02-27 #PAGENDA STAFF REPORT
DATE: February 27, 2012
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Sean P. Crumby PE, Assistant City Manager /Public Works
SUBJECT: SEAL BEACH TENNIS CENTER UPDATE
SUMMARY OF REQUEST:
That the City Council receive and file this report.
BACKGROUND AND ANALYSIS:
On November 11, 2008 the City Council adopted Resolution Number 5812
authorizing the City Manager to execute an agreement with First Serve Tennis,
Inc. for management of the Seal Beach Tennis Center. First Serve began
operating the facility full time on January 1, 2009. First Serve is tasked to
operate, manage and supervise the Seal Beach Tennis Center, consisting of 16
tennis courts, clubhouse, pro shop, gym, and locker room facilities.
After the completion of fiscal year 2010/11, the Seal Beach Tennis Center was
operating at a deficit of approximately $64,000. At that time the City Council
directed staff to look into all contracts in conjunction with the Seal Beach Tennis
Center in an effort to reduce the expected deficit for the fiscal year 2011/12
budget.
On July 25, 2011 the City Council adopted resolution number 6168 approving a
revised agreement for the management and operation of the Seal Beach Tennis
Center with First Serve Tennis, Inc. At the time it was reported that the
anticipated savings that the City should expect to see would be approximately
$37,133. This would have reduced the anticipated deficit from approximately
$64,000 to approximately $26,867 for fiscal year 2011/12.
As part of the terms of the revised agreement, First Serve has an incentive to
operate the facility with a profit to the City. If the facility breaks even, First Serve
and the City will split evenly all revenue above the cost neutral point.
Agenda Item P
Expenditures
Revenue
Total Profit
$71,635.72
$81,000.00
$9,364.28
When the revised agreement was adopted by the City Council on July 25, 2011
staff reported that a detailed review would be presented during the mid -year
budget review. Over the past 6 months, staff and First Serve management have
worked closely together to identify new revenue sources while finding other areas
to reduce expenditures.
While preparing the mid -year budget review, staff has analyzed all revenue and
expenditure accounts. At this time the facility has reported revenues of $81,000
and expenditures of $71,635.72 for a profit of $9,364.28. All expenditures
accurately reflect all invoices that the City has received to date. The
expenditures for the remainder of the year are expected to be similar or possibly
reduced from the first half of the year.
ENVIRONMENTAL IMPACT:
There is no Environmental Impact related to this item
LEGAL ANALYSIS:
No legal analysis is required for this item
FINANCIAL IMPACT:
The following represents the mid -year budget analysis from July 2011 —
December 2011 for fiscal year 2011/12 of the Seal Beach Tennis Center. All
expenditure accurately reflect invoices that the City has received through
December 31, 2011.
RECOMMENDATION:
It is recommended that the City Council receive and file the Mid -year budget
analysis of the Seal Beach Tennis Center
SUBMITTED BY:
e
' ublicWorks
Sean P. Crumby
Assistant City Manager/
Prepared by: Tim Kelsey, Community Services Supervisor
Page 2
NOTED AND APPROVED:
Ingram, Cit nager