I appeared before the City Council Oct. 9 to make a public comment about something I read in the Sammamish Review concerning the proposed YMCA-Community Center deal and advisory vote.
The article, at this writing, is not on the paper’s website. The paragraph that caught my eye was this:
“Councilman Don Gerend said he didn’t think voters should worry about the prospect if the YMCA backing out of the agreement several years in if the facility is running a large annual deficit–the council would never sign off an agreement that left the city at risk for that.”
I disagree with this statement and appeared at the meeting to say so. (Also at this writing, the tape of the meeting has yet to be posted to the city’s website. My comments are within the first 15 minutes of the meeting when it is posted.)
There is no doubt in my mind that if the Community Center is running a big deficit that the YMCA would come back to the city council to renegotiate the contract. Nor is there any doubt the if the Community Center becomes a black hole the Y wouldn’t seek to walk away. A contract is only as good as the next crisis and then it’s a starting point to renegotiate.
In an unusual move, several members of the council broke from practice and commented on my comments. Mayor Tom Odell said the Y has every motivation to make the deal work: a $5m capital investment and a $1m investment in staff and support time. I agree. But what if the deal doesn’t work? Fiduciary duty demands you change the deal or take the loss and get out.
With respect (and I meant it), I said Gerend’s remarks were naive and blithely dismissive of voters. Council Member Nancy Whitten said it was her understanding the contract would have a mutually-agreed termination clause. If Whitten is right (and I suspect any contract would include such a clause) Gerend’s statement is also misleading.
Councilman John Curley remarked that if the Y can’t make a go of it as a 501 (c) 3 and with taxpayer dollar support, then no private enterprise could do so.
If the Y walks, I said the city will have 100% responsibility for the Community Center.
Citizens have a right to know the risks of this deal since they are being asked to vote on it.
I have yet to decide how I will vote in the silly advisory vote, but I do know that the city isn’t forthcoming to the citizens with all the facts, details and risks so that voters can make an informed choice on the Nov. 6 ballot. By law the city can’t promote the vote but I believe it can sit down with the paper and answer a series of detailed questions posed by the reporter. I suggested the city do so.
Previous posts I’ve written on this topic may be found:
Another risk factor: The Y’s representative told the Council on July 16 she did not know when the operation will break even. Any business plan should have this projection. The inability to answer this question suggests there is no business plan.
Frankly, if I were on the Y board and my staff came to me asking to spend $5m but didn’t have a business plan to say when the project would break even, I’d fire somebody. (Like Mitt Romney, I like having this option.) If I were on the city council and staff came to me seeking $25m and there wasn’t a business plan for this project, I’d throw them out of the room. (Only the city manager can hire and fire in the city manager form of government.)
I don’t have any philosophical issues with public-private partnerships under certain circumstances and if the deal is structured properly. It’s a way to stretch dollars and turning government functions over to private enterprise to operate more efficiently is a well-known principal advocated by both political parties (but mostly Republicans, which thereby perplexes me with our local critics who are Republicans opposing on principal this public-private partnership).
But up to this point, this deal seems to be poorly thought out and rushed to put it to an advisory vote, subjecting the citizens to voting on something on which they are largely without facts.