This summer, the city of Kenai entered into a management service contract with the Boys and Girls Club to run the Kenai Recreation Center beginning July 1. The contract was carefully designed to maintain the previous level of services while saving the city $87,000 per year.
With the closing of Big Kmart and a subsequent loss of nearly $800,000 in sales tax revenue, as well as a decrease in savings account interest rates, increases in insurance and employee costs, and the governor's elimination of municipal assistance and revenue sharing, the city entered this fiscal year with a large deficit. In addition to cuts of $485,000 from last year's budget, the city had to draw more than $400,000 from its savings account and increase the property tax rate by 1.5 mills to balance the 2004 budget.
The city felt the Boys and Girls Club, as a structured organization, would do a terrific job of managing our facility. In fact, the city would like to commend the Boys and Girls Club for its willingness to form a partnership, as well as for its professionalism throughout a long and contentious process.
A majority of the council felt the partnership would be a great benefit to our community by breathing new life into existing programs, particularly the Teen Center, and bringing with them an impeccable national reputation and a high level of professionalism, expertise and new resources.
The National Parks and Recreation Association has urged cities to team up with Boys and Girls Clubs to avoid duplication of services and to built on the collective strengths of each organization. The Boys and Girls Clubs throughout the country have been moving into adult programs with huge success. After viewing such partnerships in other communities, the city made the decision to give it a try.
The proposal, however, was met with fierce opposition from a group who named themselves the "Friends of the Recreation Center" (FORCE). Their main objective was to "force" the city to maintain the facility as it was, regardless of the issues we are facing. When the council voted to form a partnership with the Boys and Girls Club, the "Friends" filed a lawsuit to challenge the agreement on a variety of issues. The court ruled in their favor on only one position. On July 10, the court basically found the city code's definition of "professional services" too vague and non-inclusive of facilities management.
While we respect the court, we disagree with its decision. Alaska case law states the court is to defer to a city's reasonable interpretation of its procurement rules. Unfortunately, the court did not do so. The court's decision ordered the city not to pay "the consideration called for under the contract to the Boys and Girls Clubs," and not to do anything "in furtherance of that agreement" until further order of the court.
FORCE has continued to accuse the city of closing down the facility unnecessarily. That is not accurate. During court proceedings, the city (through affidavits of the finance director and the city manager) clearly stated it would have to shut down the facility for the short term if the court threw out the partnership contract. The city administration did not, nor does it now, have any budget authorization to staff the facility itself.
Changing the budget requires an ordinance and that process takes time. Given the "rules of the road," meetings must be advertised, ordinances must be drafted, public hearings must be held on changes to the budget, and enactment delays must be dealt with.
Even if the council had approved spending more money than initially budgeted by ordinance, the administration would have been directed to restructure and strengthen the operations at the recreation center and would have had to hire and train employees.
It has been suggested that the former employees could have stepped right in to manage the facility while the city worked out other details. Unfortunately, the proposal offered by the former employees was unworkable. For example, the group refused to work under the Parks and Recreation director. Instead, they wanted to work under the Public Works Department, which is kind of like having a library contractor supervised by the street department.
The court expressed hope the parties could work out "some arrangement which would allow the Boys and Girls Club to continue management of the facility pending whatever action is deemed appropriate to the resolution of the case," while at the same failing to recognize the contradiction between this statement and its previous mandate to stop any payment to the Boys and Girls Club and to stop doing anything to further the agreement with them.
The city had no choice but to comply with the court injunction. A nonprofit corporation simply does not have the money to keep operating without payment and no guarantee of any future payment. While retaliatory court motions could have gone on and on, the most straightforward action was to change the city code and advertise for qualified facilities and program managers.
At the Aug. 6 council meeting, a three-step plan was introduced to get the recreation center open as soon as possible by revising the city code regarding professional services contracts. Because of the FORCE lawsuit, other professional services contracts have also been called into question. Since this method of operation has been one the city of Kenai has used for years, as have other cities across the state and nation, we felt it was necessary to address the root of the problem rather than "band-aid" the situation.
To proect the integrity of the process and to ensure continued operation of at least three other city-owned facilities, the council has elected to follow a three-step process, which we anticipate will be concluded at the Nov. 5 council meeting:
1. Amend the city code by enacting an ordinance that more clearly defines "professional services."
2. Advertise publicly a "Request for Qualification," seeking qualified contractors to operate the facility.
3. Award a contract to the most qualified applicant based on reviews by the administration and the city council.
Step 1 has been introduced and acted upon by the council. Step 2 is in the formative stage and will be implemented as soon as permitted by law, 30 days after enactment by the council. Step 3 will occur in a timely manner barring any unforseen challenges by outside parties.
If the council's plan remains on track the community could see the reopening some time in late November or early December. The process cannot be speeded up under any circumstances because of the laws governing how government must do business.
Had the city's original plan been allowed to continue, the recreation center would now be running in an efficient manner for the enjoyment of all. However, until the city completes the changes to be in compliance with the court injunction, the center will remain closed.
To do otherwise would not service the best interests of our community. The city council of Kenai sincerely regrets the inconvenience this matter has caused to some of our citizens. We believe when the Kenai Recreation Center reopens, it will be better than ever.
John J. Williams is the mayor of Kenai.
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