Aquatics Work Session Minutes of the Town of Cary, NC

April 10, 2007

4:30 p.m.

Conference Room 10035, 316 N. Academy St., Cary, NC

Present: Mayor Ernie McAlister, Mayor Pro Tem Jack Smith, Council Members Marla Dorrel, Ervin Portman, Jennifer Robinson and Nels Roseland; Council Member Julie Robison arrived late, and her arrival time is noted in the minutes

The work session began at 4:35 p.m. The agenda follows:

1.   Review of Project Scope

2.   Current Project Status

·         Design Team Selection

·         Private Fundraising Effort

3.   Council Discussion

The following information was presented by staff on a chart:

Facility Comparisons

Mrs. Mary Henderson, director of parks, recreation and cultural resources, stated 15 firms responded to the request for proposals; a committee narrowed the list to three and conducted interviews; and staff will bring the issue to council in May for consideration.

Mrs. Henderson stated Hill Carrow is present to talk about private fundraising opportunities, and he has developed a plan based on the industry standard to allow corporations and individuals to donate. She stated typically it takes a few years to build pledges and a few years to have the money in hand.

Mr. Carrow stated a $5 million campaign usually takes two years to run the campaign to solicit donations with payments being made over a five year period. He stated the plan is scheduled to be presented next month to council, and it will be scoped for more than $5 million to have surplus for other aspects of the facility. He stated the plan will include both a corporate and philanthropic approach, and the approaches will not be mutually exclusive. He stated that naming rights might be included in the mix, and recognition of donors will be part of the plan.

Mayor McAlister stated the Town is ready to move forward with the $15 million that is set aside, and Mr. Carrow’s timeframe takes seven additional years and discounts the amount of money from the private sector significantly, and this is compounded by the timing of the $10 million interlocal funding that is paid over a 10-year period. He does not doubt that the private funds will be raised; however, the timing and net value of the funds should be considered.

Mrs. Robison arrived at 4:44 p.m.

Mr. Carrow stated the sales process for private fundraising is challenging at this point, because there’s not a site or an approved fundraising plan. He stated they have proposals out in excess of $5 million at this time, but he can’t commit to have the money in hand in a month. He stated originally the private funds were intended to help cover the operating deficit to allow the facility to break even or better.

Ms. Dorrel stated when council voted on the aquatic issue this past November, it was not an overwhelming vote of support, and as staff sought guidance on council’s expectations on the private fundraising, there were a variety of ideas. She is concerned that council started in 2000 with a vision, and various options resulted in diversions over the years (i.e., larger venue, etc.). She stated the original vision was 450-500 seating without additional support capacity; this vision was ramped up to provide a regional venue for large scale events, including $5 million in private fundraising. She stated TAC is providing the service for the regional, large scale meets. She doesn’t think a regional venue was ever part of the council’s original vision. She distributed a handout with the following information:

Information Prepared by Marla Dorrel: 4/10/07

Comparison of Three Options for Cary Aquatics

Cost figures based on information from June 2006

She believes the expanded community center aquatic facility in the information she’s provided (450-500 seats) with outdoor aquatics without the community center itself ($24-25 million project) has merit and steps down the competitive nature and opens the door for TAC to become the premier venue. She stated it also provides back-up with another 50-meter pool when the TAC facility is being used. She noted that each example in her handout includes indoor and outdoor leisure.

Mrs. Robinson suggested referring to the aquatic facility as a small regional facility instead of a community center so as not to lose county funding.

Ms. Dorrel stated the expanded community center option (as noted in her handout) would be an opportunity to continue to get the county money.

Mayor McAlister thinks the Raleigh City Council and Wake County questioned the proposal when it was scaled back. He questioned if Cary would get any county money if it’s scaled back even more. He was concerned at the November meeting that the Town was proposing a facility that would be in competition with the private TAC facility, which will take care of the competitive needs in the community. He believes a 50-meter pool is designed for competitive swimming and isn’t as versatile as the community center concept. He would like to use the $15 million that the Town has set aside, recognize at some point we’ll build a community center (i.e., like the Herb Young and Bond Park Community Center), do the community center concept with a 25-yard pool with the addition of outdoor leisure ($4.2 million for outdoor leisure). He believes this scenario allows programming diversity and takes care of the aquatics and community center need.

Ms. Dorrel believes that a 50-meter pool provides much more versatility, and she mentioned Raleigh’s programming as an example. She stated it will allow for a full range of aquatic opportunities. She believes there’s sufficient demand for two 50-meter pools in Cary.

Mrs. Robinson concurred with Ms. Dorrel, and she believes there will be even more demand in the future based on the region’s growth. She stated swim teams and other groups need pool space and would use the 50-meter pool for regional events. She thinks the Town could still make a case for the county money that it’s a venue with 450 seats. She stated the Hillsborough facility draws large crowds, and it has limited capacity. She would like to leverage the county money so Cary will spend less and get more.

Mayor McAlister stated the cost difference (50-meter vs. 25-yard pool) is not incremental; instead, it is exponential. He stated the 50-meter aquatic feature is $7 million more than the community center facility located at a community center. He added we have plans for a community center anyway. He questioned if the benefit outweighs the cost. He added if the community center concept is successful, then it could be added at other community centers around town. He considers a 50-meter pool as a special use facility.

Mayor Pro Tem Smith asked the size of Chapel Hill’s two pools that are being built for about $5 million. Mrs. Henderson stated they are about 26,000+ square feet with a few lap lanes, three fitness lap lanes and a small instruction pool. She added that they do not have recreation components. She compared the community center concept aquatic facility and stated this model is 40,000 to 45,000 square feet and is about $6.4 million. She stated the Chapel Hill pools are a much different type of facility.

Mayor Pro Tem Smith thinks private sector will step up to meet the aquatic competition needs if the demand is there.

Mr. Roseland stated there are three important issues: (1) who is the Town’s target audience; (2) what is the cost; and (3) what is the risk to taxpayers. He wants to focus on Cary residents and the Cary recreational needs not currently met. He stated there is also a need to address competitive swimming. He believes that some options will address both needs. He stated at the November meeting Mr. Carrow committed to $5 million in private funds. He stated council is almost ready to make decision on design, and the fundraising hasn’t met his personal expectations. He’d like to see more of the private commitment either at the time council decides on the design group or awards the bid. He stated it is new information that it will take seven years to actually have the private funds. He’s concerned with moving forward on a regional venue, and he would prefer to focus on the Cary audience and the Cary recreational needs. He is not convinced the Town should take on the risk to provide facilities for competitive swimming. He likes the mayor’s idea of the community center concept with the intent to duplicate it throughout Town to meet the Town’s needs. He thinks the high school swimming issue is a school capital issue with the private sector.

Mr. Portion stated in 2000 it was stated that Cary has a need for competitive and recreational aquatics provided by the Town. He thinks the need is met, and the model that was originally hoped for was a public/private partnership. He stated based on all options, the objective will be met. He believes the demand is real and will increase. He stated the main confusion is the two funding sources: sales tax and private funds. He stated sales tax funding is still tax money, and in effect would provide two competitive venues – one financed privately and one publicly. He urged the council to exercise caution to not do harm to the private money that’s been raised. He stated we now have the opportunity for the private sector to handle the competitive needs, and he is opposed to public money being used to harm a private venture, which could result with two facilities in the same proximity in the same community. He leans toward the Town facility being a smaller venue with indoor and outdoor recreation, and he likes that this format could be duplicated throughout Town in the future. He thinks the private sector should have the opportunity to meet future competitive aquatic needs. He stated the Town’s capital project “wish list” exceeds available funds.

Mrs. Robison prefers the expanded community pool concept. She wants to leverage the county money and have a facility that will meet the long-term needs of the community and the region. She thinks a 50-meter pool provides versatility and complements the TAC facility, which will be exclusively competitive.

Mrs. Robinson stated if we build a 25-yard community center concept, then we will use $17.2 million of Cary taxpayer money with $336,000 in operations expenses each year. She stated the difference between that and the expanded community center concept (or small venue) is that the small venue concept would provide the ability to allow the private group to raise $5 million to be placed in an endowment to cover future operational expenses. She stated the county tax has already been collected and will benefit citizens of Cary. She stated 36% of the revenue from this county money generated in Cary and Morrisville, and it needs to be reinvested in Cary for Cary citizens. She urged council to consider the long-term issues. She doesn’t agreeing with pursuing naming rights for this facility. She believes the expanded community center concept with a 50-meter pool provides an opportunity for private fundraising.

Mayor McAlister stated it seems the council has narrowed the options to two: (1) a community center concept with a 25-yard pool or (2) an expanded community center concept with a 50-meter pool. He suggested the community center concept at $19.5 million, including $6 million for a community center that we will build anyway, with an add-on to include outdoor seasonal aquatics at $4.2 million. He would prefer this concept instead of a 50-meter pool. Mrs. Robinson stated in her scenario above she included outdoor aquatics; she stated without outdoor aquatics, the operating expenses increase to $464,000 per year. Ms. Dorrel stated outdoor aquatic contributes cash flow; she suggested that it be included in whatever scenario the council chooses. Mr. Portman stated it’s good to have outdoor aquatics because of the benefit it provides the community; however, he stated the incremental cash flow that it adds is not a good return.

Mayor Pro Tem Smith believes the county commissioners and Raleigh city council will support the county money being redirected to another Cary effort in a more productive way that has community-wide support.

Mrs. Robison stated her preference if the council prefers the community center concept is for it to be tied to a commitment for a community center up front and integrated into the aquatic element and not left to chance. However, her first preference is the larger facility, because she thinks it makes better business sense in the long-term. She stated she must leave the meeting at this time, and she will trust the group to come to a decision.

Mrs. Robison left meeting at 5:34 p.m. (she was not excused by vote of council).

Mayor McAlister asked if all models fit on North Cary site. Mrs. Henderson thinks they will fit, but the detail work hasn’t been done yet so she can’t say for sure. Mayor McAlister asked if the design phase will provide an opportunity to add an outdoor aquatic component at a later date. Mrs. Henderson stated staff could restructure the process to allow for this.

Mr. Roseland stated the community center concept at $13.5 million seems to be the least controversial. He suggested two or three bid alternates (i.e., like the Herb Young or Bond Park community center) for $6 million and outdoor aquatics for $4.2 million. He asked if Mrs. Henderson could come back to council on the three-component reduced scope plan after working with the three firms. Mrs. Henderson stated it would be difficult to do the community center (i.e., like the Herb Young or Bond Park community center) as an alternate because of the size of the facility and the fact that the integration of this facility with the aquatic feature is very important (staffing and efficiency of operations), but it is possible to proceed with the outdoor component as an add-on. She stated the scope and dollar amount of the community center can vary.

Mayor McAlister stated because we know that at some point in the future we’ll construct another community center (i.e., like the Herb Young or Bond Park community center), he can support using the $15 million set aside for aquatics and increasing that amount to $19.5 million and including money for a community center from the beginning and considering outdoor aquatics as an add-on.

Ms. Dorrel thinks the council needs to make a decision about the components, including outdoor components, unless the idea is to phase it, but she noted it will cost more later.

Mr. Roseland stated another approach would be to bundle it all now instead of $13.5 million with the alternates. He stated the biggest advantage of outdoor aquatics is it serves more people and adds cash flow. He stated the community center concept without outdoor aquatics will result in $464,000 in operating costs annually; with outdoor aquatics, the annual operating cost is reduced to $336,000. Mrs. Henderson stated the typical annual operating cost for community centers (i.e., like the Herb Young or Bond Park community center) is $250,000.

Mrs. Robinson wants everyone to review the ongoing cost carefully. She doesn’t want to lose the opportunity for private money. She stated the council is considering spending $23.5 million of Cary money to get less that what we’d get if we spend $15 million of Cary money and leverage the $10 million county funding. She stated spending less will result in higher operating expenses on an annual basis as a result of the loss of the private money. She doesn’t want the council to look back in 10 years and realize the decision was a mistake.

Mayor McAlister stated it’s not a fair comparison to say we’d spend $23 million for the smaller facility vs. $30 million for the larger facility. He stated the community center for $6 million (i.e., like the Herb Young or Bond Park community center) is included in that number, and we’re going to build that facility anyway.  He believes the appropriate comparison is to discount the $23 million by the $6 million, which makes the gap between the smaller facility and the large facility greater. Mrs. Robinson stated using this scenario, the Town will spend an additional $2.2 million of Cary taxpayer money and will commit more Town money for ongoing operational expenses because there will be no private funds if the council proceeds with the community center concept (as compared to the expanded community center concept).

Mr. Portman stated Mrs. Robinson is assuming that private funds will materialize. He stated there’s already significant private fundraising for the TAC facility, and private fundraising is anticipated for the downtown plan to develop. Mrs. Robinson stated a more accurate comparison of cost of the large facility vs. the small facility is $23.6 million vs. $17.2 million (based on Ms. Dorrel’s handout information). Mrs. Robinson added that with the large facility there would be $10 million from the county hotel/motel tax money.

Mr. Roseland stated if the $6 million community center (i.e., like the Herb Young or Bond Park community center) is not addressed at this time, and if council considers the community center aquatic component at $13.5 million, added outdoor aquatics at $4.2 million, this would equal $17.7 million. He asked if the net operating cost would be $214,443 less $127,575, which is a positive cash flow, so the net operating cost would be about $86,000. Mrs. Henderson confirmed the numbers. He thinks it is an option that would result in manageable annual operating expenses. Mr. Roseland hopes at that at a minimum the Town would work with designers to include a community center (i.e., like the Herb Young or Bond Park community center) as a Phase 2 add-on at a later date. He added that Phase 1 would have to be designed in a way to allow the community center to come on-line in the future phase. Mrs. Henderson reiterated that due to the size of the community center (i.e., like the Herb Young or Bond Park community center), it would be a huge add-on and may eliminate the ability to create synergies and provide management space to manage the aquatic element more efficiently. She stated it’s not impossible, but it may be difficult and may result in an inefficient final design.

Mr. Portman stated the scope for the design team to consider is now the regional venue ($30 million project). He asked if staff would have to re-scope the project if council reduces the scope of the project. He asked how this would impact timing, etc. Mrs. Henderson stated Phase 1 is site selection, programming and schematics with the intention to go into Phase 2, which is design development and construction. She stated changes can be made now before hiring the design firm. She asked if council wants to consider up to 10 sites or exclusively the North Cary site until a decision about the feasibility of the North Cary site is made.

Mr. Portman is in favor of the community center aquatic concept with the community center (i.e., like the Herb Young or Bond Park community center) and outdoor aquatics. Mayor McAlister added that two community centers (i.e., like the Herb Young or Bond Park community center) are planned for programming by 2009.

Mr. Roseland asked if it would save time and money to focus only on the North Cary site at this time. Mrs. Henderson stated it would save a little time and money, but we do own the land so we wouldn’t spend money to acquire the land. She stated staff would go through the entire site selection process to determine the suitability of the land for the project.

Mrs. Robinson supported having the venue at the North Cary site based on the accessibility to major roads; however, if the council doesn’t proceed with the large-scale venue, then she would like to look at all sites in Cary. Mrs. Henderson stated the current master plan shows a community center at each community park, and she stated there are five community parks planned in the master plan. She stated the North Cary site has been selected for the next community center, and this was pushed back in the capital improvement plan.

Mrs. Robinson wants to select the community park site in Cary that is projected to have the most density in the next five years. She suggested that the Hawes tract should be an option, and this is also a site we already own.

Mr. Roseland believes that considering multiple sites could create more delays and cost increases. Mrs. Robinson disagreed and stated projections can be made quickly based on available data.

Mr. Portman stated there’s a lot of growth occurring in west Cary. He doesn’t think it’s complicated to consider both the north and the west Cary sites.

Mayor Pro Tem Smith thinks good planning will determine the best site.

Ms. Dorrel stated we should determine the location of other pools in the area.

Mrs. Henderson stated staff can compare the two sites (North Cary and Hawes tract) and can still basically say on schedule.

Mr. Roseland stated western Cary hasn’t been shorted with major recreation and other facilities (i.e., tennis center, USA baseball, regional library, etc.). He wants to follow the master plan recommendation.

Mr. Portman stated Mrs. Robinson is only suggesting looking at both sites, and the factors stated by Mr. Roseland may support the North Cary location. He stated there are a lot of important issues other than aquatics, and he’d like to move forward on aquatics and focus on other issues. He noted that council has a responsibility to be mindful of the entire Town agenda.

ACTION: Mr. Roseland moved to direct staff to work with the top three design firms on the following revised scope of the aquatics community center project: move forward on a design that includes a $13.5 million base community center pool, a $4.3 million outdoor aquatic facility, and the $6 million recreation component; the combined cost would be roughly $23.8 million; in order to expedite construction and maximize cost savings, we should focus on the North Cary site for the combined package and revised scope.

(NOTE: The above motion supports the “community center” aquatic concept with the community center [i.e., like the Herb Young or Bond Park community center] that was presented by staff on the chart [herein] with the addition of outdoor aquatics.)

Mayor McAlister understands the motion to direct staff to focus on the North Cary site, but he does not believe it disqualifies other sites if there is a compelling reason to consider another site. Mr. Roseland concurred. Mrs. Robinson stated this does not give staff clear direction.

Mr. Portman suggested a friendly amendment to eliminate the portion of the motion that stipulates to focus on the North Cary site.

Mr. Roseland stated if the focus in on the North Cary site and if through design this site is found to be inadequate, then staff would consider other sites. Mrs. Henderson stated the motion directs staff to go with the North Cary site unless there are site problems; she stated the motion does not direct staff up front to look at other sites.

Mayor McAlister thinks the motion is perceived to limit the site to North Cary.

Mr. Roseland stated he will agree with focusing on two sites: North Cary and the Hawes tract.

ACTION: Mr. Roseland amended his motion to focus on the North Cary site and the Hawes tract.

Mr. Portman asked about other potential sites in west Cary. Mrs. Henderson stated there are other sites in west Cary, but from staff’s perspective the Hawes tract would be the preferred site.

ACTION: Mr. Portman provided a second to the amended motion.

Mrs. Robinson disagrees with losing the county money and chancing that it comes back to Cary in another way.

Mr. Roseland thinks it would be good to look at what’s the best return on the money from a town planning perspective; his intent is not to dismiss the county money where Cary doesn’t get its fair share, but this should be separate discussion.

Ms. Dorrel stated the discussion about Cary being allowed to use the county money for another project is all just speculation.

ACTION: Mrs. Robinson and Ms. Dorrel voted “no.” All others voted “aye.” The motion carried by majority vote. (Mrs. Robison was not present and she was not excused; therefore, the minutes reflect an “aye” vote for her.)

The meeting adjourned at 6:08 p.m.