City doesn’t want Austin Rowing Club’s special deal to be too sweet

City Council voted in June to grant the Austin Rowing Club the unusual privilege of negotiating a contract renewal with the city without going through the typical bidding process.

ARC and Council members argued that the special deal was warranted because the club, which had a five-year contract to operate the city-owned Waller Creek Boathouse from 2012 to 2017 and was later awarded a two-year contract extension, has not yet had a chance to prove its potential due to the delayed construction of the Waller Creek Tunnel. The tunnel was supposed to be complete in late 2013, but it dragged on for another four years, leaving the boathouse neighbor to a noisy, unsightly construction site.

But while ARC doesn’t have to compete with other vendors for the coveted spot on Lady Bird Lake, it will likely have to submit to a more stringent contract with the city if city staff and the Parks and Recreation Board get their way.

Under the current contract, the city agreed that if the contract ended, the city would “work in good faith to identify and make available alternative locations on Ladybird Lake for ARC.” Both staff and the Parks and Recreation Board have recommended removing that language in the new contract.

“That’s a city facility,” said Ricardo Soliz, a division manager for the Parks and Recreation Department, in an interview with the Austin Monitor. “We’re having you operate our facility. If we need that facility for any reason, what is the obligation of the city to help you relocate somewhere else?”

Similarly, the current contract puts the burden of large repairs for the facility (anything over $5,000) on the city. The proposed new terms would require ARC to take care of that.

“They’re making money off of (the facility),” said Soliz. “We felt that the only fair thing to do was for them to take care of the maintenance of the facility.”

The board also recommended increasing the amount of revenue that ARC must devote to providing free or reduced-cost lessons or memberships to children or low-income people. Currently, the club must allocate 10 percent, while the committee has recommended “between 10 and 15 percent.”

The city is also pursuing a new revenue-sharing agreement with the club. Under the current contract, ARC must provide the city with 3 percent of its revenue up to $300,000 and 10.5 percent of all revenue above that amount.

Under the deal recommended by staff, the club will have to pay a monthly fee of $1,000 plus 1 percent of its first $80,000 of net revenue and 8 percent of any net revenue above that amount. However, the parks board has recommended that when calculating its revenue, the club should be able to exclude any money it receives from contributions or grants and that it should be able to deduct the amount that it has spent on scholarships, free classes or other charitable endeavors.

“We thought that was an important exclusion,” said Board Member Dawn Lewis, who helped draft the recommendation, during the most recent meeting of the board. “We felt it was pretty important to put a lot of emphasis, to make sure the rowing club would really work to make sure we were serving underserved communities, and we wanted to make it as easy as possible in that sense.”

Soliz explained that the recommendations for the contract are just a starting point in the city’s negotiations with the club.

“They will push, we will push back. I don’t know where we’ll end up at the end of the day,” he said.

Photo by dremiel made available through a Creative Commons license.

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