YMCA Board looking forward to resolving financial issues

Before the Ponca City Aquatic and Family Center-YMCA was opened in December 2010, it already traveled a rocky path. It has become even more uncertain, with the resignation of six top-level employees on Friday.

Starting about a decade ago, city officials were shocked by the finances of picking up the project, which had been shelved.

The project previously had been considered, with estimates of engineering and construction costs in hand. Voters had rejected the previous effort because it was tied to other projects which were terribly unpopular. The center took a back seat for a few years.

Then, in July 2008, the City Commission voted unanimously to reject all bids for the construction of the Ponca City Aquatic and Family Center—YMCA because new costs were overwhelmingly higher than the earlier estimates the board was using as a guideline.

A special joint meeting was called for July 17, 2008, with the Board of Commissioners and the Board of the YMCA. The two boards considered alternatives and voted on establishing a framework of priorities in moving forward with the construction of the Ponca City Aquatic and Family Center-YMCA.

Then-Assistant City Manager Craig Stephenson reviewed a memo from architect SJCF, comparing subcontractor bids to engineers estimates. Several areas were 150 percent higher than the architect’s estimate. Stephenson then read the architect’s recommendation, including starting earthwork, getting a construction manager at risk (CMR) hired, reducing the scope of the project, and grading the ball field areas for drainage and future development.

Stephenson then elaborated on what a CMR is and how the process would flow. Area builder Rick Scott then gave further insight into the process. The two boards voted to go forward with the CMR route, with no dirt work or change in scope at this time.

Delays in building the facility led to much greater expenses than had previously been estimated. To help move  the project forward, Ponca City’s Board of Commissioners moved forward with a new financial arrangement, called “construction manager at risk.”

On Oct. 6, 2008, Mayor Homer Nicholson called a special meeting to order to get a status update on the project from Brad Biddle, Schaefer Johnson Cox Frey and Associates.

Biddle began by reminding the Commission of their July 14 meeting, the last time he addressed them and recommended rejecting all bids. Biddle attempted to explain why the bid and related costs were high at the time, as well as a lack of interested sub-contractors.

Biddle reviewed the Construction Manager at Risk role, issues to be addressed on the project, and challenges. Biddle, on behalf of the committee, recommended contracting with Lambert Construction for Construction Manager at Risk (CMR) services.

The commissioners vote to find that the Ponca City Aquatic and Family Center-YMCA Project meets and satisfies the requirements of using a CMR,  and enter into an agreement with Lambert Construction.

Mark Lambert, President of Lambert Construction Company, gave an overview of similar projects the firm has worked on. Lambert then reviewed a path forward to best use CMR tools to complete the project in the most cost efficient manner, as well as a timeline.

Lambert’s company looked carefully at the plans for places where costs could be  reduced – value engineering the project to get the most bang for shrinking bucks.

The building was paid for by voters who  approved a half-cent sales tax extension for the center. The election in which the tax was approved was held Dec. 9, 2008, and  the measure passed with  1,820 yes votes (54.4 percent) to 1,524 no votes, a difference of 296 ballots.

This arrangement worked well — creating a gem of a recreation center for Ponca City and winning awards for Lambert Construction.

Groundbreaking for the center was held Jan. 12, 2009, and the first bids were opened Jan. 29, 2009.

In February 2009, Stephenson informed the Commission that work has begun on the Aquatic Center, and the final 50 bids for the project would be opened on March 19. That date was later shifted to March 26 because of spring break.

GETTING STARTED

Lambert Construction Company was approved for its first payment in the amount of $270,000 on March 23, 2009. Payments were approved monthly by the Board of Commissioners.

APRIL 13, 2009 — Payment No. 2 to Lambert Construction Company in the amount or $230,490.

MAY 11, 2009 — Payment No. 3 to Lambert Construction Company in the amount of $585,540.  The commisison also approved a contract for designing and building a rock-climbing wall for Ponca City Aquatic & Family Center-YMCA with Entre Prises USA in the amount of $241,136.

MAY 26, 2009 — Approved Amendment No. 2 to Agreement with Lambert Construction Company for a guaranteed maximum price of $20,910,040 and to be substantially complete by Sept. 14, 2010.

JUNE 22, 2009 — Payment No. 4 to Lambert Construction Company in the amount of $474,447.

JULY 27, 2009 –The commission voted on a Change Order on the project to upgrade some finishes that had been eliminated while costs were being cut. They included painted interior concrete masonry unit walls; a recommendation which failed.

The commissioners also discussed a change from painted steel mesh panels under the guard rails around the track and stairs to unpainted stainless steel, but voted to wait for a cost estimate.

Commissioners did appprove changing the indoor walking track from one color with separating stripes to two multi-colored lane track. They also approved a granite countertop for the second floor information desk from solid surface to granite countertop.

AUGUST 10, 2009

Payment No. 6 to Lambert Construction Company in the amount of $447,750.

SEPTEMBER 28, 2009

Payment No. 7 to Lambert Construction Company in the amount of $855,000.
Construction Payment No. 1 to Entre Prises USA, Inc. in the amount of $24,113.60 for construction of  rock climbing wall.

OCTOBER 12, 2009

Payment No. 8 to Lambert Construction Company in the amount of $955,800.

OCTOBER 26, 2009

City Manager Craig Stephenson gave an update on the Ponca City Aquatic and Family Center/YMCA project in regard to time extensions and change orders. Stephenson explained that due to bad weather in July and August, days had been added, making the completion date on Sept. 27, 2010. Stephenson further explained that the change order is for additional footing work for the rock-climbing wall in the amount of $6,425.39.

Stephenson went on to say that this amount does not change the price of $20,910,040.00, as contingency funds are provided for in this amount.

Payment also was approved for the pool lights from Midwest Electric Supply, from Arkansas City, Kan., in the amount of $191,262. Stephenson said there was an allowance of $225,000 in the guaranteed maximum price, which leaves $32,783.00 to be moved to the contractor’s contingency, to be used at a later date.

NOVEMBER 9, 2009

Change Order No. 1 with Entre Prises and payment No. 2 for $60,284.00 for designing and building the rock-climbing wall.

Consider and vote on Change Order No. 1 to substitute stainless steel railings, and stainless steel mesh at various locations throughout the building. This increased the Guaranteed Maximum Price to be $45,600.00.

DECEMBER 28, 2009

Payment No. 10 to Lambert Construction Company in the amount of $1,382,040.

JANUARY 25, 2010

Payment No. 11 to Lambert Construction Company in the amount of $1,290,060.

FEBRUARY 22, 2010

Payment No. 12 to Lambert Construction Company in the amount of $1,389,600.

MARCH 22, 2010

Payment No. 13 To Lambert Construction Company In The Amount Of $1,635,050.

APRIL 26, 2010

Payment No. 14 to Lambert Construction Company in the amount of $1,187,500.

MAY 24, 2010

Payment No. 15 to Lambert Construction Company for $864,500.

JUNE 28, 2010

Payment No. 16 to Lambert Construction Company in the amount of $976,125.

JULY 26, 2010

Payment No. 17 to Lambert Construction Company in the amount of $1,395,550.

AUGUST 23, 2010

Payment No. 18 to Lambert Construction Company in the amount of $709,013.

SEPTEMBER 13, 2010

Purchased exterior signage for Ponca City Aquatic & Family Center-YMCA through Lambert Construction Company for $47,030.

Purchased 53 pieces of Cardio Exercise Machines for the Ponca City Aquatic & Family Center-YMCA for $130,734  from Cybex and $123,300 from Precor, Inc.

SEPTEMBER 27, 2010

Purchased Kids’ Zone Play Equipment in the amount of $45,989 from International Play Company, British Columbia.

Purchased furnishings in the amount of $40,766 from Scott Rice Office Interiors, LLC, of Wichita, Kan.

Payment No. 19 to Lambert Construction Company in the amount of $1,187,662.

OCTOBER 25, 2010

Purchased strength training bars, weight plates, barbell sets, barbell racks, dumbbells, dumbbell racks and accessories, delivered and installed in the amount of $35,082.28 from USA Sports, Inc. (Troy Weightlifting Equipment).

Payment No. 20 to Lambert Construction Company in the amount of $653,600.

NOVEMBER 1, 2010

Purchased equipment, materials, installation, software and installation, start-up and training for security camera system in the amount of $67,561.25 from Eales Electronics Corporation of Oklahoma City.

NOVEMBER 22, 2010

Consider and vote on Construction Payment No. 21 to Lambert Construction Company in the amount $377,523.

DECEMBER 4, 2010

The ribbon cutting for the new Ponca City Aquatic & Family Center/YMCA was held and the center opened at 5:30 a.m. Dec. 6, 2010.

DECEMBER 28, 2010

Consider and vote on the purchase of Infield Field Mix, Site Security Service, and materials for outside benches, outside cigarette urns/trash receptacles and bike racks through Lambert Construction Company in the amount of $94,570.19 for Ponca City Aquatic & Family Center-YMCA.

Consider and vote on Construction Payment No. 22 to Lambert Construction Company in the amount of $195,897.00 for construction of the Ponca City Aquatic & Family CenterYMCA.

JANUARY 24, 2011

Payment No. 23 to Lambert Construction Company in the amount of $754,385.

FEBRUARY 24, 2011

During the City Commission meeting, citizens voiced concerns about the YMCA policy regarding membership fees, and the definition the YMCA had for household and family membership. Mayor Nicholson explained that the City built the building and leased it to the YMCA, which has its own Board of Directors and its own governing body.

[Editor’s note: With the passage of same-sex marriage, the YMCA has modified its membership policy.]

FINANCIAL STRUGGLES

Since the opening of the center, the YMCA Board has struggled financially. Some of the financial  hardships came from weather extremes which led to higher than expected utility costs. Construction errors were found and corrected.

The YMCA Board said the problems came from trying to manage such a large facility without adequate information about what the routine costs would be, as well as how membership income would be.

In some months, the YMCA took in less than its expenses, threatening staff salaries. Short-term loans helped fill the gap while other measures were considered.

EFFORTS TO IMPROVE

In recent months, members of the Y’s staff and board talked about efforts to rebrand the Y and provide greater value to members of the facility.

In addition, City Commissioners and Y board discussed proposed changes to the Recreation Center Operating Agreement.

City Manager Craig Stephenson said adopting the changes at a future board meeting would extend the initial period of operating from April 2017 to the end of December 2017.  The initial term was to be 10 years from April 24, 2007, with additional terms of five years.  This would move the initial term to end at the end of December 2017.

The City no longer requires the YMCA to pay some $4,000 a month for property insurance, for a savings of approximately $48,000 annually. The facility is covered by the city’s property insurance.

The agreement modification would reduce the Capital Reserve Account contribution, which is the amount of money the YMCA board was required to keep on hand for repairs to the property. Stephenson said this reserve account has had only one claim in the past six years.

It would also modify the area in the operating agreement to provide that the YMCA would be responsible for the main building and the property surrounding it in that parcel to the curb.

The City took over operation and maintenance of the parking lot, ball fields and other area surrounding the ball fields. Ponca City Junior Baseball leases the fields and pays for the mowing and feeding of the fields. The estimated savings to the YMCA for this modification would be approximately $21,000 annually, Stephenson said.

In its rebranding efforts, the YMCA focused on Health, Hope and Opportunity, and providing a value-based membership with free benefits for members.  Among those benefits is free youth sports and $10 swim lessons, and free child care while a parent is working out or attending a class.

MOVING FORWARD

Other efforts to improve the YMCA’s bottom line have included freezing or reducing staff salaries over the past three years, with a savings of $80,000,  YMCA Executive Director Shane Harland said.

Despite all the cost-cutting measures, the bottom line looks bleak. On Friday, six high-level employees, including Harland, submitted their resignation.

YMCA Board President Joel Gilliland has called a special meeting of the board at 3:30 p.m. Tuesday in the Y’s art studio.

The agenda includes discussions on staff resignations and  the impact on the future direction of the Y; the impact of the resignations on operations; the current financial situation and possible remedies; and assigning work teams to handle the actions discussed.