City Council Meeting: May 26, 2011

Agenda Item: 8-A

 

To:               Mayor and City Council 

From:           Rod Gould, City Manager

Subject:        Santa Monica High School Program Agreement

 

 

Recommended Action

Staff recommends that the City Council take the following actions:

1.     Authorize the City Manager to negotiate and execute a program agreement between the City of Santa Monica and the Santa Monica-Malibu Unified School District allowing the City to lease and utilize facilities at Santa Monica High School in consideration for an annual amount from the City’s General Fund equivalent to one half of the transaction and use tax revenue received by the City.

2.     Authorize the budget change outlined in the Financial Impacts & Budget Actions section of this staff report.

 

Executive Summary

The demand for recreation and sports opportunities for all community members, including adults, children and youth exceeds the capacity of the City’s parks and recreational facilities.  To that end, Council approved a Master Facilities Use Agreement and related supplemental agreements in 2005.  This agreement allowed the City and the community to use Santa Monica-Malibu Unified School District (District) playfields, recreational facilities and buildings which were under-utilized during non-school hours.  The agreement included elementary and middle school sites but did not include Santa Monica High School (High School). 

 

The District is offering the City the opportunity to lease and utilize facilities at Santa Monica High School including a swimming pool, play fields, courts, a gymnasium and other facilities which are unused or underutilized during non-school hours.  The City’s leasing of these High School facilities during non-school hours will also effectuate the will of Santa Monica’s voters.  In November 2010, Santa Monica voters approved Measure Y, which established a half-cent transaction and use tax.  More than 68% of the voters approved an advisory measure specifying that half of the City’s half-cent transaction and use tax revenue are to be used to support school, educational and after-school programs. 

 

Staff is recommending that the City and District enter into a Program Agreement for community use of High School facilities.  The initial term of the Agreement would be 10 years with an extension of a second 10 year term by mutual agreement. In consideration for the use of High School facilities, the City would pay the District an annual amount from the City’s General Fund equivalent to one half of the revenue received by the City from the one-half percent transaction and use tax.  Payments would be made to the District on a monthly basis, commencing June 2011, in an amount equal to one-half of the amount that the City receives from the State Board of Equalization (“SBOE”) in the SBOE’s monthly payment to the City of the estimated tax.  Payment to the District would occur within five days from receipt of the SBOE payment.  Upon the City’s receipt of each quarterly reconciliation from the SBOE of actual Tax revenues compared to the SBOE’s estimated payments made to the City, the City would provide the District with an accounting and would adjust the next monthly estimated payment upward or downward by any difference between the prior quarter’s estimated payments and actual tax receipts.  A budget appropriation is required in the amount of $1,090,000 for the FY 2010-11 payment.   

 

 

Background

Council approved the initial Master Facilities Use Agreement and related supplemental agreements in 2005.  The purpose of the Agreement was to allow the City and the community to use elementary and middle school playfields, recreational facilities and buildings which were under-utilized during non-school hours.  The Agreement provides unrestricted revenue to the District in return for use of District facilities.  In April 2009, Council approved exercising the first renewal option by amending and extending the Agreement by three years through June 2012.  The District has utilized City funds to support the District’s goal to promote extraordinary achievement for all students while simultaneously closing the achievement gap. 

 

The community demand for playfields and other sports and recreational facilities continues to exceed the supply of both City and School District sites.  District and City staff recently met to discuss opportunities for community use of Santa Monica High School recreational facilities during non-school hours in exchange for payment by the City.  The City’s leasing of these High School facilities during non-school hours will also effectuate the will of Santa Monica’s voters.  In November 2010, Santa Monica voters approved Measure Y, which established a half-cent transaction and use tax.  More than 68% of the voters approved an advisory measure specifying that half of the transaction and use tax revenue are to be used to support school, educational and after-school programs.

 

Discussion

The proposed Program Agreement would provide for City access to Santa Monica High School facilities during designated times when school is not in session.   High School facilities would include tennis courts, outdoor basketball courts, football field and track, south gymnasium, swimming pool, dance studio, storage space, and parking lots.  Additionally, to facilitate the City’s use of the High School’s facilities, the District would also make available program-related equipment and furnishings.

 

The initial term of the Agreement would be 10 years with an extension of a second 10 year term by mutual agreement.  In the event that the District fails or refuses to perform any of the provisions of the proposed Program Agreement, the City Manager would advise the District Superintendent and they would meet and confer on the steps necessary and appropriate to cure such failure. If the City Manager determines that the failure has not been sufficiently corrected and that the District’s failure to perform such obligation continues to materially deprive the City and the community of the benefits, the City Manager would have the right to notify the District that the Agreement may be terminated unless such failure is cured within six months.

 

Contingent upon approval of the proposed Program Agreement, the City and District would enter into a Santa Monica High School Supplemental Facilities Use Agreement (“Supplemental Use Agreement”) which would set forth specific High School Facilities and available time periods for City use and would govern, among other things, program scheduling, maintenance, staffing, monitoring, permitting, priorities for use, the setting and charging of applicable permit fees (with fees set at an amount not to exceed the costs of administering the permits), and all other administrative and operational aspects of the City’s use of the High School Facilities. 

Under the proposed agreement, District and City staff would jointly establish an annual Facility Use Plan that would designate specific community use times based on the school calendar, special events, and scheduled maintenance.  Each year, the District would provide the City with its calendar that includes dates for the start and end of the school year, vacation and holidays, shortened and pupil-free days, times for late start and early dismissal, and special events for the High School.  The District would provide the City with any revisions to the calendar within adequate time for the City to make any necessary changes to its operations or use of the High School Facilities.  The District and City would work collaboratively to ensure a high level of communication between the parties regarding the City’s use of the High School Facilities for City programming. 

The City and District would cooperatively establish an annual schedule governing facility or field closures for scheduled maintenance and renovation.  Revisions to the Supplemental Use Agreement may be necessary due to facility or field maintenance and renovation. 

 

Payment to the District

The City will receive monthly payments of estimated transactions and use tax proceeds from the State Board of Equalization. In consideration for the use of High School facilities, the City would pay the District an annual amount from the City’s General Fund equivalent to one half of the revenue received by the City from the one-half percent transaction and use tax.  Payments would be made to the District on a monthly basis, commencing June 2011, in an amount equal to one-half of the amount that the City receives from the State Board of Equalization (“SBOE”) in the SBOE’s monthly payment to the City of the estimated tax.  Payment to the District would be made within five business days from receipt of the SBOE payment.  Upon the City’s receipt of each quarterly reconciliation from the SBOE of actual Tax revenues compared to the SBOE’s estimated payments made to the City, the City would provide the District with an accounting and would adjust the next monthly payment upward or downward by one half of any difference between the prior quarter’s estimated payments and actual tax receipts.

 

Financial Impacts & Budget Actions

Staff estimates that the transaction and use tax will generate $2,180,000 for the one quarter it is in effect for FY 2010-11 (April 1 – June 30).  The tax is estimated at $11.4 million for FY 2011-12.  The District would therefore receive payment of $1,090,000 for FY 2010-11. Revenue estimates will be revised periodically based on additional guidance from the State and the City’s sales tax consultant.  

 

A budget appropriation is required to account 01274.566810 in the amount of $1,090,000 for the FY 2010-11 payment.  Appropriation requests for future years will be requested in future budgets.

 

 

Prepared by:  Elaine Polachek, Assistant City Manager

 

 

  

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Rod Gould

City Manager

 

Rod Gould

City Manager