Report Prepared by: Christopher Jensen, Director, Parks & Community Services
Title
SUBJECT: Approval of Lease Agreement Amendment with the Boys and Girls Club of Merced County for Use of McCombs Youth Center for a Five-Year Term with the Potential to Extend an Additional Five Years
REPORT IN BRIEF
Considers amending the current lease agreement for use of the McCombs Youth Center by the Boys and Girls Club of Merced County for a five-year term with the potential to extend an additional five years.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving amended service agreement with Boys and Girls Club of Merced County for youth programming at the McCombs Youth Center for a five-year term; and,
B. Authorizing the City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve as recommended by staff; or,
2. Approve, subject to other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for consideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
As provided for in the 2025-26 Adopted Budget
DISCUSSION
History of Lease Agreement for McCombs Youth Center
Historically youth center use has varied due to a variety of factors including program capacity of service partners, community interest in programs offered, and unforeseen circumstances such as the pandemic. To adjust to historical variabilities in programing and facility use, City Council adopted a revised contracting practice for use of youth centers which included a 1-year term with the potential to extend use for an additional two years. While service agreements do not authorize the provider to sublet the property, limiting revenues to fundraising capabilities, Lease Agreements such as the type offered with the use of McCombs Youth Center, authorize the tenant to rent out the property to help keep cost of operations as low as possible. The original concept for leasing the McCombs Youth Center included zero monetary allocation towards operational expenses from the general fund. The Lease Agreement maintains the City as the responsible party for facility repairs, but not as the financial source for routine maintenance. Leases are designed for the tenant to carry out those duties.
Over the past two decades Boys and Girls Club of Merced has relied on the City Parks & Community Services Department to fund routine maintenance and or utility expenses. In the face of growing Departmental expenses, in 2024/2025 the allocation to the Boys and Girls Club was reduced from $35,000 to $25,000. In order to bring the terms of the agreement in line with the original operations plan for the building, this years budget reduces the Departments expense from $25,000 to $0.
Staff met with the Parks & Recreation Subcommittee about the current terms of service and lease agreements and goal of decreasing costs to the department while providing more confidence in our service providers through our contracting terms. It was suggested the Recreation and Parks Commission consider staff’s recommendation to decrease the annual contribution to each facility from $25,000 to $0 and in turn, modify existing terms to a three-year agreement with the potential to extend for two additional years for a term not to exceed 5 years. The City and its Service Provider would retain the potential to terminate the agreement with a 90 day notice if deemed necessary during the term of the lease.
The tenant, Boys and Girls Club of Merced County, has expressed interest in maintaining their use of the McCombs Youth Center and the willingness to work within the proposal reductions to offset costs of operations to the General Fund. As such, it is the recommendation of Staff that Council consider renewing the lease agreement with the modified terms suggested of 5 years with the potential to extend an additional 5 years, with $0 annual expense dedicated to routine operational costs.
IMPACT ON CITY RESOURCES
Annually, the City of Merced would be responsible for not to exceed amount of $0 toward utilities. This reduces the Parks & Community Services Department budget shortfall by $25,000.
Building maintenance and repairs will continue to be the responsibility of the city.
ATTACHMENTS
1. Lease Agreement for McCombs Youth Center with Boys and Girls Club of Merced