REPORT TO COUNCIL
SUBJECT
Title
Award of a Contract to California Sports Center for Gymnastics Instruction Services (F18-146)
Report
REPORT IN BRIEF
Approval is requested to award a two-year contract to California Sports Center of San Jose for gymnastics instruction services and camp programs offered to the public through the Department of Library and Community Services, with an option to renew for three additional one-year periods, provided pricing and service remain acceptable to the City.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code, contracts for this type of service are awarded pursuant to a Request for Proposals (RFP) best value process, unless otherwise exempt from competitive bidding. Additionally, City Council approval is required for the procurement of goods and/or services exceeding $100,000 in any one transaction.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
In providing recreation services, the City contracts with private firms to teach recreation classes and camps. The revenue generated by these programs are shared between the City and the contracting firm. The City has successfully contracted with California Sports Center to provide gymnastic classes and camps for more than a decade, during which time the contractor has established a strong following. The contractor currently offers over 125 gymnastic classes during each two-month session, while providing instructional camps throughout the year. Enrollment in the gymnastic programs has experienced significant increase over the last few years, corresponding to an increase in revenue generated by the program, which is anticipated to continue during the next few years.
Specifically, in FY 2017/18 total revenue was $440,623, in FY 2016/17 $437,445, and FY 2015/16 $389,558. With the gymnastics sport remaining a highlight of the 2020 Summer Olympics, staff anticipates an increase in participation based on the increased interest in gymnastics that occurred after the 2016 Summer Olympics.
The expectation of a successful gymnastics program requires classes/camps to accommodate between 2-50 participants, while offering differing times and age-appropriate classes based on skill level. California Sports Center is responsible to provide qualified instructors that plan and conduct the classes while gaining the City’s approval for any marketing materials generated. As with all recreational programs offered by the City, the City will handle all registration, provide the equipment and facility space, and coordinate marketing online and in the Activity Guides provided throughout the year.
A Request for Proposals (RFP) was issued on March 7, 2018 and directly distributed to 11 potential proposers. In addition, the RFP was posted on the City’s DemandStar public procurement network. On April 5, 2018, only one proposal was received from California Sports Center (CSC).
The CSC proposal provided information demonstrating their qualifications to teach gymnastics, highlighting that it is currently teaching the gymnastics program for the City. In addition, CSC further demonstrated it can meet all City administration requirements. In accordance with Sunnyvale Municipal Code section 2.08.120, the City diligently negotiated with the sole proposer to agree to reasonable pricing that is the best value to the City. Despite the rising cost of living in the Bay Area, the negotiation resulted in retaining the same revenue split for the agreement that the City negotiated in the previous contract. Therefore, staff is recommending an initial two-year contract with the option to extend the contract for three additional one-year periods.
FISCAL IMPACT
Customarily, the City establishes not-to-exceed amounts for the purchase of goods and services. As this is a shared revenue contract with the goal of increasing instructional offerings, a not-to-exceed limit may unnecessarily limit this ability. CSC will be paid 73% of the resident registration fee for all gymnastics classes and 80% for camp program participants, minus any refunds. The remaining 27% and 20% (and non-resident differential), respectively, will be retained by the City to offset administrative costs of providing facilities and equipment, promoting programs, registering participants, contract management and responding to customer service inquiries.
Over the most recent two-year period for which complete data is available, the total fee revenue was $759,403, with $547,048 earned by the contractor and $212,355 retained by the City. Based upon anticipated enrollment, the current contract is valued at $452,000.
Funding Source
Recreational programs are funded by the General Fund.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
1) Award a two-year contract to California Sports Center to provide gymnastics instruction services, in substantially the same form as Attachment 1 to the report and authorize the City Manager to execute the contract when all necessary conditions have been met, and 2) delegate the authority to the City Manager to renew the contract for three additional one-year periods, if services and pricing remain acceptable to the City.
Staff
Prepared by: Gregory S. Card, Purchasing Officer
Reviewed by: Timothy J. Kirby, Director of Finance
Reviewed by: Cynthia Bojorquez, Director of Library & Community Services
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Draft Services Agreement