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CSD Should Not Get into Athletic Club Subsidy Business

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I am not quite sure what the Discovery Bay Community Services District (CSD) is thinking by likely keeping the doors open of the Discovery Bay Athletic Club for an additional 120-days at a cost of $32,000 of taxpayer money.

While I understand there is a grand vision of the community center with added programs and other goodies with the athletic club included, and while that’s great in theory, it’s not the CSD job to get into the athletic club business for four months as an experiment. Shockingly, the CSD is apparently willing to spend the money to find out the viability.

According to the Brentwood Press, this is what they claim this will cost Discovery Bay.

The cost of keeping the lights on in the current site and maintaining the facility for the more than 250 residents already using the center will run around $18,000 per month. Howard estimates that a minimum of $10,000 per month will be generated from the current users; the additional $8,000 a month coming out of the town’s Zone 8 funds, which are designated recreation and landscape dollars.

Zone 8 funds are used for landscaping and recreation. It appears a health club enters the gray area of how these funds could be used—if anything, this should be labeled as a misuse of public funds.

While General Manager Rick Howard may want to claim “we want to show that we’re improving, not taking away something,” he needs to also realize you are subsidizing a health club before other town services—in any other city or town, I don’t think funding a health club is anywhere near the top of any list.

I say nonsense; after the $32k is spent you may have nothing to show for it except 250 got to be subsidized by everyone who pays into the landscape district. You also have a scenario where you have a pay to play scheme.

The current 250-members pay a fee for access to the facility which is not enough to cover overall expenses, so they get an additional $8k per month to keep the doors open through taxpayers. Now there is a situation where taxpayers can’t use the facility they are already paying for unless they become members of the community center.

According to CSD Director Kevin Graves, he explained it a little bit better than Ruth Roberts article.

He explained that they will be keeping open the facility for a period of 120-days to see if they can make it successful or not. Right now, they don’t know if the building is or not.

“There were 1,500 members of the club at one point, now it’s down to 250 people, no way to evaluate it for ourselves unless we maintain it for a period of time. Only after some time managing it ourselves will we know if it’s a viable option for the property,” stated Graves.

He shared how there had been no real management in over a year so they cannot assess the value at this time.

“How else do we know if it will be successful enough or not?” asked Graves.  “Our goal is to see if we can build up clientele and make it viable.”

While I understand the logic and I can appreciate them wanting to do their due diligence, this is still a very bad idea as the town government should not be getting into the athletic club business—especially when it’s losing an estimated $8k per month, that is what private business and investors are for.

My response to Mr. Graves is rather simple, there is a reason why the club has gone from 1,500 members to 250—there are better options for athletic clubs in the market place who are willing to want to spend the money to recruit new members. I doubt the Town will be as efficient or willing to put out a full fledged marketing plan as say, Diamond Hills.

This athletic club idea is irresponsible and the CSD should know better than to keep the doors open.

If the CSD really has its heart set on keeping it open, then go to the 250 members who want this club open and divide up the $8k. As new members are added, the fee can be reduced accordingly, but don’t take the $8k from taxpayers who may also be non-members.  Someone who will not use the club should not have to help keep the doors open.

Next,  take a survey of the 250 members and see if they would pay an additional $32 per month (x250 people) to get to $8k to leave the doors open—overall that is $128 over 4-months.  I doubt a majority of them would approve.

Ultimately, this is a giant boondoggle of a project where the town will be subsidizing a luxury, not a necessity.  I get it, people want this open, but there is a want and then there is reality.

Reality is that after 120-days, this will be evaluated after $32,000 has been spent which is a low estimate. One line not to be forgotten is the following:

Howard said he has already met with employees and invited those interested in remaining on board to reapply.

This is code word for staff time being used. Staff will be used to rehire, hire, or fire employees.  Then you have the question of human resources to the town having an added burden for a four-month period.  Liability insurance is another issue. I could go on.

Then you get into major legal problems with funding. Again, how this is not malfeasance, I have no idea!  Look, I understand people want it open; I get how great this is, but there are wants and then there is reality.

I suggest the CSD go back to the suggestion box after nixing this idea. Anytime you make a financial decision like this, it should benefit the entire 16,000 plus community, not just 250 people!

No matter which direction you go at it, the thing doesn’t add up. Just say no!

Note: An email to Rick Howard was not replied to at the time I published this post.

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Categorised in: Discovery Bay, East County

24 Responses »

  1. Mike Burkholder is 100 % correct. Taking ratepayer funds and diverting them to a club that is not open to the ratepayers is wrong. How can anyone justify taking money from ratepayers for something they are not allowed access to?

    Discovery Bay should get ready for some very close scrutiny. Even if they could be successful, this is a misuse of public funds to the benefit of the membership of the club,

    Far less money was “saved” by the fire district when they closed the Discovery Bay stations two years ago. Aren’t fire stations more important than subsidizing a health club? I would have objected, just as I object to this, but where was the “clever” thinking to find a way to divert funds at that time?

  2. CSD should not touch this. Do not subsidize this club. It will not be the proper us of funds for the community as a whole. It will only benefit a few and that is not right. Insanity rules AGAIN.

  3. Excuse me… this is the most crazy thing I’ve ever seen. This is worse than Bryan Montgomery’s mortgage deal. CSD needs to use their heads and walk away!

  4. Respectfully disagree on so many levels. Hardly the few, but rather the MAJORITY want a community center offering activities to all of our residents. I can’t wait! So many residents spoke in favor of this action. I’m glad the CSD listened this time!

  5. Malfeasance. Simple as that.

    When you enter into a business that is an existing money loser where the only hope of getting it to break even is a longshot, that’s dumb.

    A town employee with expertise in marketing fitness clubs is running this thing, right? If not, then like Burkholder says, what are you offering over InShape or Diamond Hills? Aging equipment and a drop dead date if membership numbers don’t rise? Banking on the existing ten grand in revenue itself is a longshot. People may see June 30 approaching and skeedaddle between now and then. Instead of 8 grand, now you’re spending 12 to keep the doors open. Or you just pull the rug out from under who’s left and close the doors early. Lots of unhappy endings possible and not many prospects for good ones.

    Another article mentions a new parking lot that will happen right away. Is that free? If not, what is the cost to rate payers? Looks like a couple of board members got blinded by the prize and didn’t exercise due diligence.

  6. The CSD has this so called agreement with BBID for borrowing money, so they think they have deep pockets now. Typical out of control dumb politicians. Glad I do not live there. These kinds of stupid decisions are the beginning of some real serious funding problems that will come back to haunt them and ultimately it’s ratepayers who will have to bail them out. Giving government liberals credit only results in unneeded debt.

  7. I love reading the comments of people who are willfully uneducated on the subject they are commenting on. It’s like watching an astronomer who has never looked at the stars. Classic. The assumptions made by people with no sense of this communities history is laughable at best.

    It isn’t a health club come Monday, it’s a community center that currently only offers athletics. I would be willing to bet my youngest daughter that over the next four months the Community Center Committee and the CSD Board will be working hard to keep costs down while still adding MORE programs beside just athletics, for the benefit of the whole community. A community center is a public service, like roads and police services, and none of these services pay for themselves. Most Community Centers offer programs and those programs have fees above the taxes and rates paid by the public. Honestly, if the Community Center can claim even 40% of operating costs this way it would be a huge success.

    Are there some questions that need to be answered, sure, all projects of this size have questions… but none of them have to do with 32,000$. I mean seriously, educate yourself people! Sometimes it takes money to make money, sometimes we pay a certain amount to reap savings in the future, and sometimes we ban together for the betterment of the whole community. The information and data the CSD can compile over the next four months could be monumental in helping the Board answer the bigger looming question of finding a adequate revenue source moving forward. (This is what should be talked about) But lets be honest, this board had one bite at the apple and they took it and I applaud them for it. They got a property for pennies on the dollar (would have cost around 4 million just five years ago) and have a great starting point in moving forward and delivering on something that Discovery Bay has been waiting two decades for. Had this board not acted as swiftly and prudently as they have who is to say how much taxpayer funds could have been wasted in the future for a plot of land that wasn’t near as perfect. This location is centralized, it is already developed for services the CSD wanted to provide (you save way more than 32,000$ but simply resurfacing the tennis courts than having to build them from scratch.) The decision to buy this property showed foresight and backbone. That being said, it doesn’t mean that residents should just go along with this decision and leave it to the Board to handle. Government works for those who participate, it is only as accountable and transparent as we the people require. Over the next four months and into the future the CSD is going to need the help of it’s residents to fully bring this community service into fruition. It takes a community to support a community center!

    Discovery Bay needs this community center to foster actual community, to unite different demographics, and bring people together. It will make this community stronger in the long run and that is worth way more than $32,000.

  8. The idea of a community center is a wonderful idea, but as JigsUp stated, malfeasance is the perfect word to describe this. Discovery Bay non athletic clbu members should be furious at this attempt to spend this kind of money on data collection when they should have already done it prior to buying.

    @Delta Sun Times, what large support is this you are talking about? Can you prove this? Just because people show up at a meeting in support of something doesn’t mean the rest of the community is all for it, that just shows people can attend a meeting. Look at Measure S and Measure Q, people don’t want to pay for something when they have to. Look at the Contra Costa Water District ballot. If the athletic facility is so great, they would have more than 250 members. Think about that.

    @Sandbar which one on the CSD are you? Your rhetoric screams politian. So how do you propose passing the future parcel tax on this scheme? Is the CSD going to allocate more money from Zone 8? I don’t think so.

    This is a bad move by CSD and I am sure Contra Costa Taxpayers Association won’t put up with it when they get wind of it. I can’t beleive burkee and I agree on something.

  9. Burkholder, you are my boy but I disagree with you on this. I think you spend a little now for a lot later. I know you like the idea of the project from our offline chat, but I think you are being a bit picky on how they get to the end result. I know this $32k is a waste of money, but think big picture.

  10. A total misuse of public funds and shame on the CSD.

    Curious Mr. Berkholder but do you dislike the entire project or this 120 days subsidy? I think it’s two different things that people are mixing into one.

    • I don’t mind the idea of a community center. I actually think its a great idea. I just am not a fan of this 120 day subsidy. It puts the funding with Hoffman/coco County agreement at risk. Also, LAFCO may have an issue with this.

  11. @Jill Thompson 55 Burk knows who I am and I am not one of the five Current CSD Directors.

    I may sound like a “politician”, but ma’am I am a statesmen.

    Not one, not a single one of the ballot measures you mention ran competent campaigns in my not so humble opinion. They allowed their opposition to dictate the tone and direction of the conversation with voters. They played defense in an arena where offense reigns supreme. James Carville once said your opponent can’t hit you when you already have your fist in his face and boy oh boy is that correct. Every minute spent playing defense is minutes you could have spent getting your “message” out to voters. None of those measures ran serious field efforts even though they were supported by unions (boots on the ground). These are just the tip of the iceberg of the major catastrophic incompetence shown by these measure efforts.

    I’d tell you how I’d run the parcel tax (I would probably push for first investigating a benefit assessment vs. Parcel Tax) but then you have the chance to counter it in advance. I can’t tell you the pitch I’m going to throw before I throw it, what fun would that be?

    Zone #8 should (I’m not sure of exact current level so I might be off some) have around $500,000 in reserves… so I’m sure they could afford another $32,000. Furthermore some of the capital projects planned for the coming years will no longer be needed thanks to the facility it has just purchased for the Community Center site. Though Zone #8 has been spending more than it takes in for a few years (because of community supported park enhancements), that should reverse by 2016-17. I do not, in any way, believe this Community Center can maintain the operation costs that come with a fully functional Community Center through Zone 8. To bring this project to it’s highest peaks will require additional revenue sources. Luckily, the CSD staff isn’t complete morons, nor are the Directors or the citizens who serve on the Community Center Committee. It will be years until this is a fully functional (at least three years, bare minimum) Community Center. That’s a lot of time to plan and reach out to the community and build a coalition of support. That alone gives the Discovery Bay CSD a much better chance of getting voters to approve a new revenue source. Most of the measures you cited were rushed, unprepared, and lost because of it.

  12. I will preface my comments by saying I no longer live in DB but I still am in the area for business & to ski from time to time and I have recently used the DBAC. I first joined in 2000 so I have 12 years of real observations.

    In thinking hard I don’t recall ever seeing any current CSD members (I don’t know who the new guy is) at the DBAC (M. Simon’s wife, yes). So these folks have no or very minimal direct knowledge or understanding of this ‘business’. Howard’s comment about towel service is just plain silly given the circumstances. At the two gyms I now belong to if I want a towel I pay $1 for it and then I own it or I pay a monthly towel fee.

    The facility is a POS and probably has never been ‘managed’ worth a damm. The primary things it has going for it is location, the tennis courts and pool. Location us huge for folks like me who probably appreciate a nice (normal) gym but don’t want to make the 20 mile round trip to BW. For that reason alone, with the kind of population DB has, this gym could likely succeed under the right circumstances.

    I saw the financials the CSD put out when they were seeking someone to run it under contract. To a serious looker they begged more questions than they answered. I do not believe those numbers accurately depicted what it would cost to run that gym. Were the numbers real/honest….who knows. I think it could be run at a lower cost but just as easily could be run much more costly. Could it be run worse than it was….probably not.

    So this is the problem as I see it…and it not a new problem. This CSD has once again skipped over developing a real & complete plan before they leaped into this thing. From what I’m told they spent most of the run-up behind closed doors and they likely never really did any true diligence. The whole DB community center thing was always laced with wishful thinking and platitudes but short on operational substance. Many people asked them to bring forth just one example in CA of a CSD (or like entity) that has no general fund that successfully runs a ‘multi-functioning community center’ without special taxes…they would not or could not do it. These are tax and spend guys who simply raise rates when they want more money to spend.

    So should they use ‘park’ funds to subsidize a gym for dues paying members….probably not. But I say that mostly because I think they are destine to fail in their 120 day quest (doing this as a super short test without a real plan is just plain stupid). I actually think it is possible for a CSD to run this gym without consuming tax additional dollars but not with the current board members or the current GM. But you know, spending public money on a gym is really no different than their plan to spend public money on a venue for people to rent (at a loss) for private functions. In fact one could argue the gym would be a better use of funds as it promotes heath and well being plus it keeps people off dangerous roads traveling to gyms in BW or beyond.

    There are two shames in all of this……it is too bad this CSD once again was too short sighted/arrogant to do things the right way (plan first and plan well) and it is really too bad they could not convince one of the local ‘real’ gyms to step up and operate the DBAC as a satellite facility.

    One more thought….I always believed a large motivation for many of these CSD people and the GM to pursue this thing was so they could build themselves fancy offices and have a grand place to hold their board meetings. Remember this is primarily a small water/sewer outfit …not a city government. Watch and see…what ever emerges on that property will include a nice suite for the GM and ample room to hire more employees for a sewer/water district that is almost totally built-out.

    cheers

  13. Discovery Bay is fooling themselves if they think this is a good idea. They do not have the population to make it successful. The only details one needs is a town of 16,000 people, the athletic club only has 250 members.

  14. This is outrageous! Discovery Bay taxpayers should not subsidize a club for the benefit of less than 1% of the community/ratepayers/taxpayers/residents. That Zone money should be used where everyone can benefit from it.

    I want a community center, but not a subsidized private club that I am not allowed to use.

    You heard it hear first: this will not be limited to a 120 days experiment nor will the deficit be within their projections without some very creative (legal?) accounting.

    How long have the people known about this plan? Were there any secret meetings (closed sessions) where any of this was mentioned? Is it just newly announced? When will the public have a chance to weigh in?

    Lot’s of questions. And the GM hasn’t responded to Burk. Could be worse than Montgomery’s mortgage deal and that’s an accomplishment.

  15. Instead of blame bush. discovery bay should impliment a blame brian dawson slogan.

  16. @ Bobby Lott- Why would you want to blame Brian Dawson- he is no longer on the CSD. Move on.
    This whole issue also seems a bit odd to me- so if you are looking for more information on the subject, you should attend the next Community Center meeting- Monday, Feb. 11th @ 7:00PM. See you there!

  17. Glad to see Brian Dawson is alive and well….

  18. Let’s hope the folks in DB get it right. Community centers are a great asset to any community.

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