The contractor hired to determine the feasibility of putting a new international swim center in Central Park has thrown cold water on the project in its current form, saying it is too costly.
Richard Kerrigan, with the San Francisco-based Project Financial Advisory Limited (PFAL), told the Santa Clara City Council at a study session Tuesday night that in order to proceed with the project the Council would need to “right-size” it. Opinion polls conducted by PFAL, he said, show the public’s sensibilities jibe with the project financials—that the scope is too ambitious.
“Our wishlist happened, and now reality has set in,” Council Member Debi Davis said.
In its current form, the swim center and recreation center project would cost $252 million, up from $100 million four years ago, which in turn was at least double the original figure of $40 to $50 million, put forth nearly a decade ago. To stay afloat, the current swim center and community recreation center— both of which would be replaced if construction in Central Park moves forward—would need to get nearly $2 million in subsidies a year.
With a looming deficit, the Council cannot afford to allocate money for such an endeavor. The $650,000 contract with PFAL was supposed to give the Council options on how to fund the project. Kerrigan said achieving full cost-recovery is paramount to avoid deferred maintenance issues. The swim center only recovers 25 percent of its costs while the community center recovers 44 percent.
City Manager Deanna Santana said the City has a “deep interest in protecting the general fund.”
One measure detailed was offering a 25 percent reduced rate for youth and seniors, who currently pay nothing to use the center.
Tino Silva, a member of the Parks and Recreation Commission, cautioned against being “too aggressive” on the cost recovery front.
“You are going to price a lot of kids out of a place to swim,” he said. “You have to look at the forest instead of one tree.”
Polls conducted by PFAL show that the public would support a tax hike to fund the swim center, but Kerrigan said that might not be enough. A bond measure to raise property taxes by $25 per $100,000 saw more support (79 percent) than a half-cent sales tax increase (71 percent). A bond measure to levy a tax would need a two-thirds majority from voters to get passed.
According to the poll, residents would be more likely to support a property tax bond if the some of the money went toward other amenities such as parks and libraries, not just to the swim and recreation centers. However, Kerrigan said that if half the money raised by such an increase went to fund the swim center, the tax would only raise $202 million—a shortfall of $48 million. He said that project was simply too big and needed to be resized to fit the City’s budget.
Despite what Kerrigan described as general public support, Council mainstay Deborah Bress disagreed, saying the City would do better to focus on its ailing infrastructure.
“You can get out the crying towel for the kids, but I guess you can get out the crying towel out for the citizens too,” she said. “I think we all need to do our homework before we go out and play.”
Other funding sources, such as donations, were not a viable option, Kerrigan said.
Council Member Teresa O’Neill said the news “confirmed [her] suspicions.”
“At the beginning of the process, there was a sense that all the costs of the swim center could be raised,” she said.
Mayor Lisa Gillmor called community sensibility that the project is too big for Central Park, located at 909 Kiely Blvd., a “blessing in disguise,” saying the PFAL has done “phenomenal” work.
“I want to take this to the next level,” Gillmor said. “We definitely have to get more information, so we can prioritize. If we put it out correctly, it is something many people can get behind.”
Gillmor said she wants to move “hyper speed” on the project. Santana said the City is looking to have a contract for the consultant by March. In April and May, City employees will search out other revenue streams, conduct more community engagement and attempt to mitigate the impact of the cost. By June, she said, more public opinion research will be complete and she will return with a ballot initiative should the Council opt to go that route.
The Council also voted to push the appointment of a Civil Service Commissioner to a later date and accepted the resignation of Parks and Recreation Commissioner Charles Blair. Blair’s term expires in June 2019, and the Commission is looking for someone to fill his seat. A deadline applications to fill the vacancy, which are available online or in the City Clerk’s Office at City Hall, 1500 Warburton Ave. in Santa Clara, has yet to be set.
As part of the consent calendar—routine items voted on in a single motion—the Council voted to add a “special services” division to the police department. This division had previously been budgeted for in the 2017-18 budget.
Also on the docket was the approval of a public works contract. The $2.1 million contract with Anderson Pacific Engineering and Construction Inc. is for the repair of a flow meter at 1390 Norman Ave. in Santa Clara.
Council Member Dominic Caserta was absent from both meetings, and Vice Mayor Kathy Watanabe did not attend the study session.
The Council will meet again 7 p.m. March 6 in Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.