COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Parks

DATE:

December 7, 2007

BOARD MEETING DATE:

December 18, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

David G. Holland, Director, Department of Parks

SUBJECT:

EXECUTIVE SUMMARY: Parks Department Report Investigating Costs and Advantages of Private Management of the Coyote Point Marina through a Long-Term Lease or Operating Agreement Related to Findings and Recommendations of a May 17, 2007 Grand Jury Report

RECOMMENDATION:

1)

Accept the Parks Department Report Investigating Costs and Advantages of Private Management of the Coyote Point Marina through a Long-Term Lease or Operating Agreement in response to the 2006-07 Grand Jury report; and

2)

Accept Department recommendations contained herein related to that Report; and

3)

Direct the County Manager to instruct the Directors of the Parks and Human Resources Departments to work with their staff to determine the organizational structure and classifications best suited to meet the business needs of the Marina.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government.

Goal 15: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

This activity contributes to the goal by ensuring that all Grand Jury findings and recommendations are thoroughly reviewed by the appropriate County departments and that, when appropriate, process improvements are made to the quality and efficiency of services provided to the public and other agencies.

BACKGROUND:

Responding to a May 17, 2007 Civil Grand Jury report, the Parks Department hired a consultant to investigate the costs and advantages of private management of the Marina through a long term lease or operating agreement to insure that the County’s investment in the Marina is preserved and enhanced. The Consultant prepared a written report (Draft Final Report) on their findings and conclusions from their investigation. The Parks and Recreation Commission voted to finalize the Draft Final Report (Report), approve the Department’s recommendations and forward both to the Board for acceptance.

Discussion

The Report generally gives good marks to the Marina management staff and states that the Marina is being managed well and is fiscally sound. It notes that staffing levels at the Marina are higher than expected and berth rental rates were lower than what could be reasonably charged.

The Report indicates potential fiscal advantages of a private operator managing the Marina of $272,900 to $347,400 in total annual cost savings and increased revenues with an offsetting fee of $64,100 to $102,500. It also found that a private firm could successfully manage the Marina. It also identifies insufficient major long-term capital cost information as an issue that does not allow the best informed decisions, would impact the type of private management agreement, and also could increase the cost of a long-term contract.

The Parks Department is making the following recommendations regarding the Report:

1) 1)

Postpone any decision on entering into a private management agreement for three years and then conduct a similar investigation to ascertain if private management would be more cost-effective and financially advantageous

2)

Complete the in-progress capital improvements to the Marina docks within these three years to return all berths to a serviceable condition

3)

Within this three year period obtain complete and accurate fiscal information on long-term capital costs (specifically dock repair/replacement for the next 20 years) to prepare more accurate long-term fiscal projections and facilitate an understanding of the debt service burden related to long term financial risks a future potential management concession, or lease agreement would assume

4)

Consider and implement, where possible and practical, the Report’s cost saving, revenue enhancing, and management methodologies to improve Marina finances, services, and overall management during this three year period

5)

Continue and expand current marketing and amenity improvements to increase the Marina occupancy rate during this three year period

Department staff feels that by postponing a decision on executing an agreement for three years, the County would be in a better position to execute a contract, long-term lease, or concession agreement based on more reliable fiscal and operational information. During a three year period, many of the revenue enhancement, cost cutting, and management methodologies highlighted in the Report could be undertaken. If the Board concurs with the recommendations, staff recommends a review and possible realignment of Marina staffing.

FISCAL IMPACT:

There is no fiscal impact at this time accepting the report or recommendations. The Coyote Point Marina is an Enterprise Fund that does not receive General Fund money.