Council reviewed and approved the recommendations of the Adjustment Conference Committee and authorized the City Manager to negotiate and execute a Master Facilities Use Agreement and related supplemental agreements with the Santa Monica-Malibu Unified School District (SMMUSD) for an initial 10-year agreement.
As part of the agreement, which would expire on June 30, 2022, City Hall would make annual payments to the SMMUSD in the amount of $8,120,245 starting in the 2012-2013 Fiscal Year and yearly adjustments between two and four percent each year after that based upon the consumer price index (CPI).
The agreement is an effort to provide more financial certainty to the School District over a longer time frame. It sets out to provide the City and community with access to playfields, recreational facilities, and buildings.
This includes the expansion of hours at Lincoln Middle School field to include evenings upon the addition of field lights and synthetic turf and programming of the Lincoln Middle School swimming pool for community use.
The agreement can be extended through 2027 or be cut short with “three years advance notice of non-renewal prior to expiration of the term in which the City or School District determines that it cannot responsibly and prudently renew the Agreement.”
“We believe that making school facilities available to the community is an innovative way to help the city meet its needs,” SMMUSD Superintendent Sandra Lyon told the council in support of the 10-year agreement.
Similarly, Mayor Pro Tem Gleam Davis said the Master Facilities Use Agreement is an ideal nexus between City Hall and the SMMUSD in providing park space to residents.
“This is an agreement that has a wonderful history in our community of providing funds to our school district in return for making sure that our city, which is significantly under-parked and has a lack of open space, has access to the school facilities when the schools aren’t using them. It is a … win-win situation,” Davis stated.
Council member Bobby Shriver thought the agreement was financially risky for City Hall and proposed a substitute motion to enter into a five-year agreement with the SMMUSD. He was also concerned that staff’s financial projections did not take into account PERS reductions and the scaling back of redevelopment funds, ergo making City Hall’s risk in making a 10-year deal with the school district even greater.
“This is a crazy deal,” Shriver said. “This is a 10-year financing deal. The only people who can borrow for 10 years in the world today are the United States government and the government of Germany. Nobody else can do a 10-year deal. This is not possible, yet we’re doing one here.
“I’d be happy to make a three-year deal, a four-year deal. It’s just a very unusual and risky financial position to put the city in because of the length of time. We still have to be careful how we spend the money,” Shriver continued before his substitute motion was defeated by a 4-2 vote.
City Manager Rod Gould responded to Shriver’s concerns by stating City Hall and the school board would be able to make adjustments in the future based upon the annual financial status of either entity.
“This agreement says that we sit down every January, schools and city together, and we review both the school’s financial condition and the city’s financial condition and make recommendations thereof,” Gould said. “That’s the essence of this agreement. They are out if something horrid should happen.”
Under the current Master Facilities Use Agreement, City Hall’s most recent annual payment to the SMMUSD was in the amount of $7,953,227. The next payment, which is marked up by 2.1 percent, would be made on July 1 as part of the new 10-year agreement.
Both City Hall and the SMMUSD came to a mutual agreement to share school facilities, such as outdoor fields and swimming pools, in order to maximize efficient use of open space.
“Opportunities to create new parks and recreational facilities are limited because the City’s total land area is small and the City is fully built-out. Additionally, land values are very high within the City and are rising,” the staff report stated. “The purpose of the Master Facilities Use Agreement is to allow the City and the community to utilize … District recreational facilities to meet the growing demand for space that existing City facilities cannot support.”
The current Master Facilities Use Agreement was a five-year deal that was entered into in 2005 and later extended for two years.
Under the new agreement, an “adjustment conference” would be held each January “to discuss additional payment adjustments based on the value that the use of the District’s facilities has to the City, and the City’s ability to provide the School District with additional compensation.”
Council member Kevin McKeown recused himself from the agenda item; however, the other six council members were present. The final vote was 5-1 in favor of the 10-year agreement, with Shriver the sole naysayer.
