PURPOSE

The purpose of this report is to obtain City Council approval of an Agreement between the City of Burbank (City) and Steve Starleaf, Inc. for the operation of the City owned Burbank Tennis Center located at McCambridge Park (Attachment I).

BACKGROUND

Steve Starleaf, Inc. has been operating, under an Agreement with the City, the Burbank Tennis Center at McCambridge Park since 1997.  The Agreement expired in October 2002.  At the request of the Park, Recreation and Community Services Department, Steve Starleaf, Inc. agreed to continue providing facility operations under the same terms and conditions of the expired Agreement on a �month to month� basis.  This interim Agreement facilitated the uninterrupted delivery of services at the Burbank Tennis Center, as well as the tennis lesson program conducted at 5 public tennis facilities located at Olive Park, Verdugo Park, Brace Park, and John Burroughs High School. 

The lengthy negations required to complete this new Agreement were due to a number of factors. After the first Agreement period, there were a number of concerns that needed to be addressed from both the City�s and Mr. Starleaf�s prospective. One example was the difficulty the Tennis Center has had in retaining a stable food concessionaire. While both parties believe the food concessionaire is a valuable addition to the services provided at the Tennis Center, the reality of the location, proximity to more visible fast food chains, and track records of previous concessionaires have created a significant concern. In addition to addressing all of the points of concern after the first Agreement period, the renewal negotiations have been repeatedly hampered by significant administrative staff changes. In addition to changes in the Director position over the past two years, the Administrative Officer position, which is responsible for contract compliance and contract renegotiation, was vacant for over six months. Both parties also made a discerned effort to revamp the Goals and Objectives section of the Agreement by making clear deadlines with measurable goals for evaluation.  Despite all of the concerns that needed to be addressed, at the conclusion of the negations none of the items discussed resulted in significant changes to the original Agreement. All changes were minor in nature and agreed to by both parties.

It is the determination of the Park, Recreation and Community Services staff that Steve Starleaf Inc.�s management of the facility is of significant benefit to the City of Burbank.  Mr. Starleaf�s dedication and commitment to providing quality service to the patrons of the Burbank Tennis Center, as well as the Burbank Tennis Instruction Program, is directly reflected in the strong participation level in the wide varieties of programs and services offered through the framework of the Agreement.  Additionally, Mr. Starleaf has made a significant commitment to the effective use and care of the City�s public facilities.  Staff has been extremely impressed with Mr. Starleaf�s ability to address and remedy problems/complaints in a timely and effective manner. Also, during the term of this agreement, Mr. Starleaf has annually supported the fundraising and programming efforts of various non-profit agencies including Burbank Center for the Retarded, Burbank Family Services Agency, and the Burbank Kiwanis.  With this background, staff entered into the negotiation process with Steve Starleaf, Inc.

ANALYSIS

A staff negotiating team (consisting of Deputy Director Garth Nelson and Administrative Analyst II Carrie Matson) facilitated the negotiations with Mr. Starleaf.  Through a series of meetings with Mr. Starleaf, staff has reviewed and revised the various terms and conditions of the operating Agreement. In addition, the Goals and Objectives for the Tennis Center have been updated for the next 5-year term (Exhibit B of Attachment I). As part of the process, staff and Mr. Starleaf identified specific areas for address and minor modifications.  The following section represents the key components, and it is important to note that there are no major changes being proposed in the new Agreement.

Term � The term of this agreement will be 60 months or 5 years and provides for an extension of an additional 5 years, provided the appropriate notification of �interest to extend� is received by the City from the Operator within the designated timeline and that the City determines that the Operator is in substantial compliance with the Goals established in Exhibit B of this Agreement.  Additionally, during the last year of the Agreement, the parties may mutually agree to extend the term of the Agreement on a �month to month� basis pending renewal of the Agreement or the commencement of management and operation of the premises by a new operator.

Payment � The Operator agrees to pay the City a monthly amount that shall be equal to the greater sum of percentage of monthly gross receipts equal to 8%, or monthly minimum of $2300.  This amount is the same as the payment terms within the current Agreement and provides revenue to the City annually in the amount of $27,600.

In addition, the Operator agrees to pay the City $500 per month specifically identified as funding for Tennis Center Capital Improvements.  Capital Improvement revenue will result in an annual dedicated revenue source of $6,000 for on-going maintenance and improvement of the Tennis Center facility, and is the same as the payment terms in the current Agreement.

Due Date � Rent shall be payable quarterly, and due 30 days after completion of each quarter.  The Operator shall provide the City with a monthly gross receipts report for each month of the quarter.  The reports shall itemize any and all receipts received including those from sub-leased arrangements with the Tennis Center.

Capital improvement payments by the Operator will be made quarterly ($1500), and will start 90 days after the execution of this Agreement, and are due 30 days after the completion of each quarter.

Reports � The Operator shall provide an annual report each September to the Park, Recreation and Community Services Board on the status of operations and the attainment of Goals as identified in Exhibit B of the Agreement.  Additionally, the Operator shall provide a 6-month update report on the status of operations and the attainment of Goals in Exhibit B to the Director of Park, Recreation and Community services each March.

Accounting System and Business Records � In addition to all accounting practices identified in the initial agreement, the Operator shall ensure that all receipts are reconciled on a daily basis.

Facility Maintenance and Other Services � The Operator agrees to assume the daily maintenance of the 12 courts and the Tennis Center building and restrooms.  The City will be responsible for all landscape maintenance, exterior painting, exterior lighting, and HVAC repair and maintenance, refuse pick up service, rodent control, and exterior pest control.

Schedule of Operations � The basic hours of operation of the Burbank Tennis Center shall be 8:00AM to 10:00PM.  Amendments to these basic hours of operation can be implemented with written City approval, but the permitted hours shall not be earlier than 6:00AM or later than 11:00PM.

Programming � The Operator is required to provide a broad program of tennis activities as identified in Section 14 and 20 of this Agreement.  Failure to provide the services and programs as identified in these sections shall be grounds for termination of the Agreement.  The programming components will be reviewed on an annual basis by the Director of Park, Recreation and Community Services and the Park, Recreation and Community Services Board.  Amendments, deletions, additions, or changes will be made by mutual agreement at the Park, Recreation and Community Services Board.

The programmatic goals identified in this Agreement represent a multifaceted offering of tennis activities (Attachment II) designed to: (1) meet the need of all age groups and skill levels; (2) provide preferential use and a favored fee structure for Burbank residents; and (3) develop tennis programs designed to target mainstream, as well as �at risk� youth within the community.  It should be noted that Mr. Starleaf has achieved the programmatic goals identified in the current Agreement and has bi-annually presented these accomplishments to the Park, Recreation and Community Services Board.

FISCAL IMPACT

As proposed, the Agreement between the City of Burbank and Steve Starleaf, Inc. provides for an annual revenue of not less than $33,600 and a 5-year term revenue of not less than $168,000.

Annual � Rent $27,600 + Capital Funds $6,000 = $33,600

5-year term � Rent $138,000 + Capital Funds $30,000 = $168,000

RECOMMENDATION:

The Park, Recreation and Community Services Department has made a significant commitment to provide quality tennis facilities and associated programs to the residents of Burbank for many years.  In 1997, the City of Burbank initiated a progressive operating agreement with Steve Starleaf, Inc. to deliver quality tennis programs and manage the daily operations at the Burbank Tennis Center.  The public-private partnership between Mr. Starleaf and the City of Burbank has proven to be very effective and efficient in providing multifaceted tennis programs and activities to the Burbank community.  It is therefore the recommendation of staff that the City Council approve the attached Resolution of the Council of the City of Burbank approving the Agreement between the City of Burbank and Steve Starleaf, Inc. granting an exclusive right and license to use the Burbank Tennis Center and to operate a Tennis Program and affiliated activities.

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