Form revised November 15, 2007

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Parks and Recreation	Rita Hollomon / 684-8008 Charles Ng / 684-8001	Jennifer Devore / 615-1328

Legislation Title:

AN ORDINANCE relating to the Seattle Department of Parks and Recreation; authorizing the Superintendent of Parks and Recreation to enter into a Lease Agreement with the Victory Heights Cooperative Preschool to provide preschool education and recreation programs for children and adults at the Victory Heights Shelterhouse. 

· Summary of the Legislation:  The proposed legislation authorizes the Department of Parks and Recreation (DPR) to enter into a five-year lease agreement with Victory Heights Cooperative Preschool to provide preschool education and recreational programs for children and adults at the City’s Victory Heights Shelterhouse.  The proposed agreement includes an option to extend the agreement for an additional five years at the discretion of the Superintendent of Parks and Recreation (Superintendent).

· Background: The Victory Heights Community Club bought the property and provided volunteer leadership after its development by the Federal Works Progress Association (WPA).  The Club was unable to pay the taxes, and the county took ownership of the property.  In 1954, the City purchased the Victory Heights Playground and Shelterhouse. In 1978, the play area was installed and improvements were made to the field, shelterhouse and restrooms.  The Victory Heights Cooperative Preschool has been operating at this location for over 28 years through a series of concession use agreements.

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations:  N/A

Fund Name and Number	Department	Budget Control Level*	2008 Appropriation	2009 Anticipated Appropriation
TOTAL	N/A

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes:  There is no appropriation requested by this legislation.

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2008 Revenue	2009 Revenue
Park and Recreation Fund (10200)	Parks and Recreation	Income from base Fee payment	$ 4,800	$ 6,000
TOTAL			$ 4,800	$6,000

Notes:  This lease is expected to begin on March 1, 2008.  DPR will receive $4,800 of revenue in 2008 based on a minimum payment of $600 per month for eight months.  The preschool does not operate in July or August.  For the first five years, the use fee is set at $1,555 per month.  Victory Heights Cooperative Preschool will be allowed to offset a portion of the monthly use fee provided that the net monthly use fee does not fall below $600.  The amount of the Public Benefit Offset for a given year shall be determined at the Superintendent’s sole discretion. In the event that the lease is extended beyond the initial term, the fee will be increased by an annual adjustment calculated using the CPI for each year of the agreement during the extended five year term.  Offsets can include public benefit discounts such as scholarship programs or public classes. (See Section 4 of the Lease Agreement.)

Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE Impact: 

Position Title and Department*	Position Number for Existing Positions	Fund Name and Number	Part-Time/ Full Time	2008 Positions	2008 FTE	2009 Positions**	2009 FTE**
TOTAL	N/A

Notes:  There are no positions requested as a result of this legislation.

· Do positions sunset in the future?  N/A

Spending/Cash Flow

Fund Name and Number	Department	Budget Control Level*	2008 Expenditures	2009 Anticipated Expenditures
TOTAL	N/A

Notes:  Not Applicable.

What is the financial cost of not implementing the legislation? In 2007, DPR collected approximately $5,000 in revenues from Victory Heights Cooperative Preschool.  The proposed five-year agreement would guarantee DPR at least $6,000 per year, or $30,000, over the term of the five-year agreement.  If the agreement with Victory Heights Cooperative Preschool is not renewed, DPR might forego at least $6,000 or more in guaranteed base payments.

DPR would also risk the potential of vandalism and/or damage to the building if it was vacant.  Having the building occupied and operated by a group that has a vested interest in maintaining it is optimal for maintaining security of the building, as well as the park where it is located.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?  DPR could conduct a public meeting process to determine alternative uses for the building and then advertise a competitive bid process to select another vender. This would incur additional costs and a potential loss of revenue and services.

· Is the legislation subject to public hearing requirements:  No.

· Other Issues:  If this legislation is not passed, there could be a loss of preschool education and recreational program services to the community around the Victory Heights area. 

Please list attachments to the fiscal note below:

Attachment A:  Contract Summary

Seattle Department of Parks and Recreation

CONTRACT SUMMARY

Date:  January 30, 2007

Name of Contracting Party/ Lessee/ Concessionaire/Other:  Victory Heights Cooperative Preschool.

Contract Type:  Parks and Recreation Department (DPR) Lease Agreement with Victory Heights Cooperative Preschool.

Non-Profit___X___  or  For Profit______

New______  or  Renewal (or extension of existing Lease)  __ X – Long Term____

Term  of Lease:  5 years (03/01/08 - 03/01/13) with a 5 year extension at DPR’s option.

Purpose of Lease:  To provide preschool education and recreational opportunities for children and adults at the City’s Victory Heights Shelterhouse.  The Shelterhouse is approximately 2,430 sq. ft.

Public Benefit:  Community involvement, reduced enrollment fees for low-income and/or diverse populations, educational and recreational benefits, and parenting classes for the parents of enrolled children from Seattle Community College.  The monetary value to the City is at least $9,550 per year.

Revenue or Offsets (as applicable):  Revenue in the amount of $1,555 per month which may be reduced by public benefit offsets to a minimum payment of $600.  This equates to a maximum of $955 per month that the Lessee can potentially offset from monthly rent with the Superintendent’s approval.  The Lessee can request a public benefits offset reduction in rent by submitting a yearly public benefit statement requesting offset approval by the Superintendent and providing documentation of verifiable public benefits offsets.  Lessee will pay a monthly utility use fee of $150 and will also perform regular indoor janitorial cleaning of the facilities.  Lessee may identify the amount of Public Benefit Offset it is requesting for the subsequent school year and the justification for the request. 

Brief description, overview, history, general terms and other pertinent info:

The Victory Heights Community Club bought the property and provided volunteer leadership after its development by the Federal Works Progress Association (WPA).  They were unable to pay the taxes and the Victory Heights Playground and Shelterhouse were purchased by the City from the county in 1954.  In 1978, improvements to the play area, the field, shelterhouse and restrooms were made.  The Victory Heights Cooperative Preschool has been operating at this location over 28 years through a series of concession use agreements.