Fiscal Note: Seward Park Art Studio Operation

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Parks and Recreation	Royal Alley-Barnes 684-8001	Marilynne Gardner 233-5109

Legislation Title:

AN ORDINANCE relating to the Department of Parks and Recreation; authorizing the execution of a Temporary Use, Occupancy and Maintenance Agreement with Seward Park Art Studio, Inc. for the provision of ceramic and other visual arts programs to the public.

Summary of the Legislation:

This legislation authorizes the Department of Parks and Recreation (DPR) to execute an eight-year use and occupancy agreement, with a four-year option subject to DPR's approval, for the operation of ceramic and visual arts programs for the public at the Seward Park Bathhouse facility.

Appropriations (in $1,000’s):

Fund Name and Number	Department	Budget Control Level*	2002 Appropriation	2003 Anticipated Appropriation
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

Expenditures (in $1,000’s):

Fund Name and Number	Department	Budget Control Level*	2002 Expenditures	2003 Anticipated Expenditures
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

Anticipated Revenue/Reimbursement (in $1,000’s): The estimated fee is based on a CPI adjustment included in the agreement and the Department’s % of any increase in gross receipts earned by the Seward Park Art Studio over the term of the agreement.

Fund Name and Number	Department	Revenue Source	2002 Revenue	2003 Revenue
Park and Recreation Fund (10200)	Parks and Recreation	% of gross receipts	$1,200 yr end projected	$1,236 projected
TOTAL

Notes: Beginning on the Commencement Date and throughout the term of the Agreement, Seward Park Art Studio shall pay to the City on a monthly basis a Use Fee of 1% (one per cent) of all Gross Receipts herein, from the previous month. The total amount of revenue to the Department increases as the gross income increases. Important services to the public will be provided under the Agreement, however, DPR does not expect to fully recover the cost of operating this facility from the Use Fee revenue as a condition of the contract. Performing and visual arts facilities are dependent on attracting discretionary revenue and building a fee based user groups. For 2002 to-date the department has actual O&M costs of $985. As with other concession facilities, the department maintains its stewardship role in protecting public assets by being responsible for the integrity of the exterior of the building and the roof. Seward Park Art Studio is responsible for all-interior maintenance and improvements over the life of the agreement.

The draft agreement states that “…DPR shall pay to Seward Park Art Studio the prorated share of any such utility bill that has been reviewed and approved by DPR and that is directly related to a DPR activity on the Premises, as calculated on the percentage of square footage for any month in which DPR occupies any portion of the Premises.” As this contract language indicates, Seward Park Art Studio has budgeted expenses related to its uses and hours of operation as a revenue center. Uses outside of its primary focus pay a calculated percentage of utilities. The Department’s use of the building would be for non-pottery/ceramic purposes and would most likely be limited since there are no conference rooms. The utility bills in the summer reflect the use of water by the department to water the exterior landscape. Since the metering is in Seward Park Art Studio’s name, the Studio and DPR review the current bill against historical information and decide on the amount to be paid by Parks. The overall cost to redesign the meters at this bathhouse is greater than the benefits.

Total Permanent Positions Created Or Abrogated Through Legislation, Including FTE Impact; Estimated FTE Impact for Temporary Positions: Not applicable.

Fund Name and Number	Department	Position Title*	2002 FTE	2003 FTE
TOTAL

* List each position separately

Do positions sunset in the future? (If yes, identify sunset date):

Not applicable.

Background (Include brief description which states the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Seward Park Art Studio has been operating at the Seward Park Bathhouse facility under a City use permit since 1982. DPR established exclusive operating permits with various Performing and Visual Arts (PVA) organizations at the DPR's Madrona Dance Studio, Green Lake Bathhouse Theater, Seward Park Bathhouse Art Studio, and Pratt Fine Arts Center following a significant budget cut in 1981. Seward Park Art Studio (SPAS) has been the facility operator at the Seward Park Bathhouse facility for the past 19 years. Over that time period, SPAS has evolved from an advisory council established by DPR into a premier provider of fee-based ceramic and visual arts education and instruction to diverse segments of the public, including young people. The proposed agreement will permit these public programs to continue to be provided by SPAS at the Seward Park Bathhouse facility.

The financial cost of not implementing the legislation (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented):

Not applicable.

Possible alternatives to the legislation which could achieve the same or similar objectives (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

Not applicable.

Is the legislation subject to public hearing requirements (If yes, what public hearings have been held to date):

No.

Other Issues (including long-term implications of the legislation):

SPAS will pay the City a Use Fee each month equal to 1% (one percent) of all Gross Receipts. With the start of each subsequent accounting year, the Use Fee will be adjusted for inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Seattle-Tacoma-Bremerton area, as published by the U.S. Department of Labor.

The Temporary Use, Occupancy, and Maintenance Agreement will continue ceramic and visual arts programming for the public at the Seward Park Bathhouse facility for at least the next eight years.

FOR CAPITAL PROJECTS ONLY

Background (Include brief description that states the purpose and context of legislation, the expected useful life, anticipated customers/users, assumed level of LEED or other sustainable design elements. Also include record of previous legislation and funding history, if applicable):

Not applicable.

Project Name:

Project Location:

Start Date:

End Date:

Spending Plan and Future Appropriations for Capital Projects (Estimate cost of legislation over time; list timing of anticipated appropriation authority requests and expected spending plan. Please identify your cost estimate methodology including inflation assumptions and key assumptions related to the timing of appropriation requests and expected expenditures. In addition, include the projected costs of meeting the LEED Silver standard in all facilities and buildings with over 5,000 gross square feet of occupied space. Also, be sure to include percent for art and percent for design as appropriate):

Spending Plan and Budget	2002	2003	2004	2005	2006	2007	Total
Spending Plan
Current Year Appropriation
Future Appropriations

Key Assumptions:

Funding source (Identify funding sources including revenue generated from the project and the expected level of funding from each source):

Funding Source	2002	2003	2004	2005	2006	2007	Total
TOTAL

Bond Financing Required (If the project or program requires financing, please list type of financing, amount, interest rate, term and annual debt service or payment amount. Please include issuance costs of 3% in listed amount):

Type	Amount	Assumed Interest Rate	Term	Timing	Expected Annual Debt Service/Payment
TOTAL

Uses and Sources for Operation and Maintenance Costs for the Project (Estimate cost of one-time startup, operating and maintaining the project over a six year period and identify each fund source available. Estimate the annual savings of implementing the LEED Silver standard. Identify key assumptions such as staffing required, assumed utility usage and rates and other potential drivers of the facility’s cost):

O&M	2002	2003	2004	2005	2006	2007	Total
Uses
Start Up
On-going
Sources (itemize)

Key Assumptions:

Periodic Major Maintenance costs for the project (Estimate capital cost of performing periodic maintenance over life of facility. Please identify major work items, frequency):

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Funding sources for replacement of project (Identify possible and/or recommended method of financing the project replacement costs):