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MOTION AUTHORIZING EXTENSION OF CONTRACT WITH PETER JUAREZ TO OPERATE OAK PARK TENNIS COMPLEX
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RECOMMENDATION
It is recommended that the City Council adopt a motion approving and authorizing a one year extension of the existing contract with Peter Juarez for continued operation of the Oak Park Tennis Complex through March 31, 2016, and authorizing the City Manager to take appropriate actions to carry out the purpose and intent of the motion.
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SUMMARY
Oak Park Tennis Complex is located within Oak Park, a 61-acre multi-use park property. Peter Juarez currently operates the Oak Park Tennis Complex on behalf of the City. The original five-year agreement, authorized by City Council on April 21, 2009 was due to expire on March 31, 2014. The City Council approved an additional one (1) year option from April 1, 2014 through March 31, 2015. The Tennis Complex is operating well under the current management and continues to provide significant community benefit. Staff recommends extending the current operating agreement for one additional year (Attachment A). The extension is being requested to allow staff additional time to schedule a request for proposals in summer 2015. Several other operating agreements with higher priority are at or near expiration and staff must secure these prior to moving forward with the tennis complex agreement.
DISCUSSION
Background
The Oak Park Tennis Complex is comprised of 11 tennis courts, a practice court area, a full-size pro shop, and a lounge. Two tennis clubs operate at this complex: Stockton Tennis Club and the Oak Park Women’s Tennis Club. The complex provides lessons, court rentals, pro shop sales, tournaments, a junior tennis program, various Northern California Tennis Association or United States Tennis Association league programs, and other special events.
The City directly operated the tennis complex until 1987 when it began contracting out operations of the facility. Three different individuals operated the complex for varying contract periods from 1987 until 1998. On October 27, 1998, the City Council authorized an agreement with Peter Juarez to operate the facility. In 2003, the City conducted a Request for Proposals for the operation of the Oak Park Tennis Complex. Peter Juarez was the only respondent to the RFP. Because he was the only respondent and because of his previous experience operating the Oak Park Tennis Complex, staff did not convene the selection committee process and instead met with him to negotiate an agreement.
On July 12, 2005, the City again took over the operation of the Oak Park Tennis Complex on behalf of the City and entered into an agreement with Peter Juarez to provide tennis instruction only. On September 26, 2006, the City Council entered into another one-year agreement with Peter Juarez for tennis instruction only with the option to renew for three additional one-year terms.
On April 21, 2009 the City Council awarded a three-year contract with two one-year renewals to Peter Juarez for the operation of the Oak Park Tennis Complex. Peter Juarez requested and was granted the two options to extend the agreement through March 31, 2014. On March 4, 2014, City Council approved the third option for one year which is set to expire March 31, 2015.
The operating agreement allows the City to provide the community with tennis-related activities for which the City receives the greater of two revenue options: $650 per month or a percentage of sales.
Present Situation
The current operating agreement requires specific activities to occur at the facility. The operator reports monthly on both tennis activities and daily revenue generation from those activities. The City maintains rights to audit and review records. In addition to tennis operations, Peter Juarez supervises the operation and maintenance of the facilities. As the operator, he is responsible for day-to-day maintenance and janitorial activities. The City is responsible for physical plant maintenance including upkeep of the courts, capital improvements and landscaping. The City pays for utilities however staff meets quarterly with the operator to review utility usage.
The current operator is performing well, and the community would benefit from a third one-year extension of the agreement. The City will begin a Request for Proposals process in summer of 2015 and return to Council with the results.
Public Notice
The City Charter requires the publication of a notice to lease City property. “A Notice of Intent to Lease City Property” has been published at least 10 days prior to City Council Action.
FINANCIAL SUMMARY
Peter Juarez will continue to pay the City a monthly fee of $650 or a percentage of gross sales after sales tax, rentals and instruction revenue, whichever is greater as follows:
• 25% of all receipts for all court sales
• 10% or all group and private lessons
• 4% of all Pro- Shop sales receipts
Utilizing a licensed tennis professional to operate the facility is anticipated to generate approximately $12,000 in revenue for the City. The City will continue to pay facility maintenance and utility costs, appropriations for which are included in the FY 2014-15 Adopted Budget for the Community Services - Recreation Fund 044.
Attachment A - Third Amendment to Agreement for Operation of the Oak Park Tennis Complex