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Burgess pool savings are unknown

Original post made by Heyward Robinson, Menlo Park: Central Menlo Park, on Oct 22, 2006

In their literature, the Winkler, Duboc, Boyle campaign claims that
privatizing Burgess pool is saving the city over $400,000 annually.
At the September Parks and Recreation meeting, commissioners asked
staff what the savings at the pool were. Staff stated that could not
quantify the savings or costs to the city. A follow-up call to the
city's finance director yielded the same answer. As council
members, Duboc and Winkler have ample access to the most accurate
financial information that the city produces, and can easily make the
same inquires that I did. John Boyle, as a member of the city's
budget advisory committee, should know these numbers as well as
anyone. Yet when presented with this information at their October
19th "Rally to Defend Burgess Pool", Winkler, Duboc, and Boyle, along
with their supporters, repeatedly shouted that the number is valid.
It is not.

Heyward Robinson
Menlo Park Parks and Recreation Commission
City Council Candidate

(This letter was submitted to The Almanac, but because The Almanac does not publish letters to the editor from council candidates, it is being posted here instead)

Comments (14)

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Posted by Concerned Voter
a resident of Hillview Middle School
on Oct 22, 2006 at 5:08 pm

Fergusson and Cohen are council members, too. Why don't they, at a public meeting of the council, ask that the staff spell out the savings from privatizing the operation of the pool. It seems to me they could improve the quality of the debate with coherent, focused and persistent questions, and clearly express their frustrations at not getting complete data from the staff, if that what happens.

If you are elected to the council, and you are part of a new majority on the council, do you plan to make some changes in the staff?

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Posted by Nick Naclerio
a resident of Menlo Park: Central Menlo Park
on Oct 22, 2006 at 11:28 pm

As a fellow Parks and Recreation Commissioner, I take issue with Candidate Robinson’s representation of the September commission meeting and feel that he is being unfairly critical of city staff. Staff presented information on the aquatics programs offered by Menlo Swim and Sport and on the results of a survey that found a very high level of satisfaction with the programs. Candidate Robinson asked a Parks and Recreation staff member if they could quantify the exact cost savings to the city for the aquatics programs. Staff replied that pool finances was not on the commission agenda and that we were only three months into the fiscal year BUT there was no reason to expect that the savings would not be at least equal to the amount that the city had originally budgeted to operate the pool - since all expenses related to the pool are now being charged to Menlo Swim and Sport. Staff further stated that the comparison between the original city budget and the current situation was apples-to-oranges since Menlo Swim and Sport was offering a much wider range of programs and more extensive hours than the city had ever budgeted to provide. That certainly leads me to believe that we are getting an aquatics program that would have cost the city more than $400,000 without spending any tax dollars on operations. More importantly, we now have a better program than we had before and we have avoided the need to hire and fund long-term pension obligations for dozens more city employees.

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Posted by Concerned Voter
a resident of Hillview Middle School
on Oct 23, 2006 at 12:15 am

But did the $400,000 cost included allocated costs from managers, such as the city manager and community services manager -- costs that have not gone away with the privatization of the pools? Are you saying that the $400,000 are all direct costs of operating the pool?
In other words, is the city's planned spending for this fiscal year $400,000 less than it would have been had the pools not been privatized?

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Posted by long time resident
a resident of Menlo Park: Downtown
on Oct 23, 2006 at 4:45 am

The granting to Tim Sheeper the complete control of the taxpayer funded Burgess pool smells of the worst case of political payback in Menlo Park history. Here is an almost 7 million dollar facility being given away to a private organization for a rental rate of $0 (zero dollars) per year for the next five years.

Why was this done?

When the present majority took over council almost 4 years ago, one of the first major actions they took was to re-examine the proposed Burgess Park pool project. Although this had been finalized over many years of public input, this majority (DuBoc, Winkler and Jellins) decided to examine the possibility of building a 50 meter pool. Why? Because Menlo Masters (Tim Sheeper's private organization), was being evicted from the Sacred Heart pool and they needed a new facility and they wanted a 50 meter pool. This effort was led by the Sinnotts (Lauri and Sam), political supporters of this council majority.

The net result of this review was a delay of several months, and the City missed the opportunity to get the construction out to bid earlier. City Staff was opposed to the 50 meter pool for many reasons and finally this idea was dismissed because staff determined that a full EIR would be needed to pass CEQA requirements for a larger pool.

This critical delay occurred during a period when construction costs were sky rocketing. When the bids for construction came in after this un-necessary delay, they were way over estimates. This resulted in further delay, while the project had to be re-engineered to try and get it built for less money. Another year delay. All the result of this council's failure to get the construction going in time.

You would have thought this would have ended there. Hardly.

This council majority decides that the now built pool should be privatized, supposedly because this city would save money. The City had no idea how much money, if any, would be saved. This was so evident in the staff report. This report at first said the deficiet would be 800 thousand dollars, but at the council meeting it was reduced to 400 thousand dollars. In point of fact, the city had no idea if any deficit at all would be incurred since it was a new facility and operating cost and attendance and full cost structure were yet to be determined.

Nevertheless, the majority decided to award a no bid contract to Tim Sheeper for a rent of zero dollars / year. Mr. Sheeper has refused to honor a commitment to the Solo Swim group (a Menlo Park organization) the use of the facility. They have been charging the public much higher usage fees than other surrounding cities. There have been several health related events due to negligence on the part of Mr. Sheeper's staff.

However, the Sinnotts now have the use of the Burgess Park Pool and they don't have to travel to Redwood City to get their swimming exercise. The deal stinks. Incumbents Winkler and DuBoc along with Jellins are the responsible parties.

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Posted by Another view
a resident of Menlo Park: The Willows
on Oct 23, 2006 at 8:09 am

To: A long time resident:

I don't know if it's as dark as all that. In fact, all six candidates for council say they love the Sheeper program and wouldn't change it.

Some question the no-bid contract. But it's obvious that with Sheeper running the program at no cost to the city, the city is saving a lot of money. We just don't know exactly how much.

And it's my understanding that SOLO reached an agreement with Sheeper and that's all patched up.

In a survey, pool participants gave a resounding approval rating to the Sheeper operation -- maybe 90 percent. Bottom line: It's great, but private-public partnership can be tricky. I'd like to know more about the actual cost savings.

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Posted by NoOnNoBidContracts
a resident of Menlo Park: Linfield Oaks
on Oct 23, 2006 at 11:04 am

Tim Sheeper may walk on water, and it's not his fault that the council handed him the keys to our brand new pool, but if you read the contract (and how many of you have?) you'll see how lopsided it is in his favor.

I have to question the purported loss figures given that Palo Alto, which runs a couple of facilities with longer recreational swim hours than Burgess provides, says that it's making a profit on its operations. Suppose someone should have talked to them first? And they're not alone: most local communities are breaking even (some making a small profit, others absorbing a small loss) on their aquatics programs. In Los Altos, where the new aquatics facility is being financed totally by private parties, not by the public, the city has substantial input into all aspects of the operation.

Hard to put much weight on a survey that was conducted by Sheeper himself and was given to a self-selected group. How about talking to the former users of the pool, those who left because of the staff's inability to handle sanitation issues or other problems? And what about those of us who continue to use pools in other communities because the hours of operation and prices, even for non-residents, are better than those offered by Burgess?

It's immoral and probably illegal to give away a city facility, retaining absolutely no oversight, as the current council majority did with the Burgess pool. The fact that Tim is offering great programs doesn't excuse the council's failure.

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Posted by MenloMommy
a resident of Oak Knoll School
on Oct 23, 2006 at 2:10 pm

You've got to be kidding - an opinion poll conducted by the operator, not by the city or some other neutral party? To put faith into the results of such a poll is incredibly naive.

I understood the direct costs used to be on the order of $440,000 and the indirect and overhead costs around $345,000. The city should know what it is billing for the direct costs and how many employees it no longer has working on the pool, as well as how much indirect time and overhead continues to be allocated to the pool operation. If the city can't or won't tell the public, there's something really fishy happening. Is it just incompetence or worse?

Sheeper is running popular programs and charges what he says are "country club" rates. The lousy deal the Winkler/Duboc/Jellins slate created has no provision for Menlo Park to share in his success. He reaps ALL the profits while the taxpayers continue to pay for the facility he gets rent-free. It's not his fault, as someone stated above. It's a lack of principles and acumen on the part of the leadership.

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Posted by Nick Naclerio
a resident of Menlo Park: Central Menlo Park
on Oct 25, 2006 at 9:01 am

In response to the question posed about cost savings:

It is my understanding that the city applies an indirect rate of about 12% to programs when calculating their costs. They do not, however, factor in the additional cost of post retirement healthcare now estimated to be about $3000 per employee per year. Nor in the case of the pool did they factor in the cost of the additional operating hours now offered by Menlo Swim and Sport.

With respect to the indirect costs, I do not think that anyone from the city has ever said that these are not real costs associated with running the program. While it is true that hiring 40 fewer employees may not immediately translate into an indirect cost savings of exactly 12% - that is the best estimate that the city has been able to make and is consistent with generally accepted accounting practices. Furthermore, it was the only number available at the time that the outsourcing decision had to be made.

In the absence of any other independent numbers, I think that the Boyle, Duboc, Winkler has campaign has taken the most conservative approach by using the city’s own budget figures. They could easily have speculated that the savings were even bigger.

Lastly, does the potential difference of a few tens of thousands of dollars one way or the other really change the fact that we now have a better program, at a lower cost, and without the long term pension liabilities that the city would otherwise have had to assume.

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Posted by Swimmer
a resident of Menlo Park: Stanford Hills
on Oct 25, 2006 at 9:59 am

Nick Naclerio writes:

"Furthermore, it was the only number available at the time that the outsourcing decision had to be made."

I disagree that the outsourcing decision "had" to be made. Council chose to make the decision without the best facts. It could have opened the pool at any time.

Most viewers who are arguing about cost savings are forgetting two points. The contract is rent-free. Losing rent is important.

Finally, the city-run pool produced revenues. Those are lost and are left out of the equation. No-one knows how much more revenue the city-run program could have produced with the larger pool capacity.

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Posted by MenloMommy
a resident of Oak Knoll School
on Oct 25, 2006 at 1:17 pm

Duboc, Jellins and Winkler left a lot of money on the table that rightfully belongs to the taxpayers of Menlo Park. At the time the decision was made, members of the community and experts from the SOLO program questioned the city's financial projections of both costs (high) and revenue (low). A competitive bidding process would easily have helped clarify this. But they stuck with their guy and refused to open up the bidding.

To make it worse, they failed to negotiate a good financial deal. A competently handled business negotiation would have resulted in the opportunity for the city to recoup a share of profits, to offset the remaining indirect costs and possibly a lot more. There was no provision for sharing in Sheeper's success. And there was no opportunity to renegotiate until the five years contract is up.

Sheeper runs popular programs, and these are no doubt more comprehensive than the city would have created. That's not the point. The decision was made for financial reasons and the financial arrangement was a lousy one. The taxpayers of Menlo Park continue to pay for the facility that profits only Sheeper.

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Posted by Catherine McMillan
a resident of Hillview Middle School
on Oct 25, 2006 at 3:11 pm

I have to agree with MenloMommy with this Council's abysmal failure with this and any scenario where MP taxpayers might expect their city "leaders" to enter negotiations. The only hard negotiations they are contemplating are those with employees' union. For the rest of us who do not want to lose sight of our moral compass: in politics, the end does NOT (should not)justify the means. That is a very slippery slope! Though most users are complimentary about Tim Sheeper's program and candidates Robinson, Bressler, and Cline have vowed to honor his contract, the fact remains that the process whereby Mr. Sheeper obtained his program was flawed and did not honor the principles of democracy or even capitalism.

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Posted by Public Pool Experiece
a resident of Menlo Park: Central Menlo Park
on Nov 8, 2006 at 1:01 pm

A few other things to consider...

Pools do not make money- they lose money. The cost to heat and maintain the facility year round is not recovered by admission fees for lap or rec swims. Summer swim lessons are the best for recouping funds- but still leave a deficit. I think a lot of cities feel that it is easier to contract out an aquatics facility than to run in themselves with a successful positive cash flow year round. This is why many pools are only open for summer months. At least the swim team, master's programs and year round lessons will provide a place for Menlo Residents and beyond to go.

Take into account that summer swim programs are typically run by high school and college students. A full blown year round program would require more full time or part time employees as well as some with benefits. For the amount of hours people expect programs, it could be very difficut to staff.

I have also seen many people dinging the MS & S for charging an "admission" fee as opposed to only charging those who are swimming. I know facilities that I have overseen in the past do this because you cannot regulate who paid what once they are in. It has been my experience that people would say they were only going in to watch their kids- but then we would see them in the pool. Also, depending on the child's age (usully under 7), they should be required for safety reasons to be in the pool with their child.

I wonder what was mandated in the contract mandated between Sheeper and the City as far as what types of community programs or hours must be supplied for the the public. I know when I have worked with public & private groups in the past, there is always that fight to make sure that the private groups are mainting the "community needs" of a public pool and not filling it up with swim team & other club programs.

I am not siding with anyone- just wanted to point out some potential issues. :-)

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Posted by SeeForYourself
a resident of Menlo Park: Central Menlo Park
on Nov 8, 2006 at 3:31 pm

Here's the staff report that contains the lease as an addendum:

Web Link

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Posted by Pool Experience
a resident of Menlo Park: Central Menlo Park
on Nov 9, 2006 at 5:17 pm

At first "quick" glance...looks like they are not abiding by the contract based on the fees they are charging for lessons and admission. They are not comparable to other public pools.

Sorry, but further commenting on this topic has been closed.

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