City-YMCA deal was sole-source, no-bid contract, no Requests for Proposals issued

By Scott Hamilton

Analysis

Sept. 16, 2019: The agreement between Sammamish and the YMCA for the latter to run the community center was the result of a sole-source, no-bid contract.

No Request for Proposals was issued that would compete management of the center.

The contract between Sammamish and the YMCA was a sole-source, no-bid arrangement. No Requests for Proposals were issued. A Sammamish businessman wanted to bid. City of Sammamish photo.

An offer by a Sammamish health club owner to submit a bid that would return 15% of the gross receipts to the city didn’t even get a hearing.

One of the leading advocates throughout the years for the YMCA was a city council member who also sat on the YMCA board, a clear conflict of interest that was ignore by the city administration and a successive series of city councils. (This member was off the council in 2012-13, when the votes were held.)

The YMCA was fundamentally the only entity supported by the city for nearly a decade before a contract was negotiated.

These lie at the roots of the current controversial examination of the city’s management contract with the YMCA that sees the agency siphoning off $1.4m a year to the Greater Seattle YMCA rather than keeping the money in Sammamish or sharing the profits with the city’s general fund.

Resuming the examination

After a period of inactivity, the Sammamish City Council resumed its march toward examination of the 2013 operating contract with the YMCA of Greater Seattle for the city’s community center.

City Manager Rick Rudometkin said at the Sept. 3 meeting that he is discussing with the YMCA possible mutually acceptable contract amendments.

Sammamish Comment reported Nov. 1 that the YMCA was taking $1.4m a year out of the city from membership fees, sending the money to the Greater Seattle YMCA. Council members Chris Ross and Tom Hornish had raised questions over financial reports, and what they said was the lack of information, presented by the Y.

Slow answers

The two council members challenged the Y to answer a series of questions, the answers for which have been slow in coming.

Following an August recess, the council is preparing to press ahead with a resolution to general questions and financial reports.

This is another split in the council along the usual lines. Hornish, Ross, Mayor Christie Malchow and Deputy Mayor Karen Moran favor a deep dive into the contract and financial cash flows. Members Pam Stuart and Ramiro Valderrama are satisfied with the Y’s performance and reporting. Member Jason Ritchie didn’t add to the conversation Sept. 3.

In the Sept. 3 council meeting, at 1:30 hrs, Hornish outlines his concerns about the current contract. Stuart and Valderrama follow and other council members chime in a short time later.

Hornish and Ross cited as their chief concerns a lack of financial accountability from the Y to the city, opaque allocation of revenues and expenses and failure to identify capital expenses required.

Valderrama said failure to identify anticipated cap-ex costs rests with both parties, not just the Y.

Stuart defended the efficiency and broad services offered by the Y.

On Facebook, Ritchie wrote, “The decision made at the time, which had very little risk to the City and taxpayers, has proven to be wildly successful with the Y being the best amenity in Sammamish. Having said that, conditions have changed and the issue of the reserves needs to be addressed. That’s what that [city manager] is doing.”

An update from the city manager is due this month.

The history of developing the community center and entering into a contract with the YMCA is long and controversial.

Community center needed since incorporation

What is now the city of Sammamish was a population and development growth area under King County’s rule.

But, just as the county failed to provide adequate roads, parks, a library and other infrastructure to the area, there was no community center. Residents had to go to Issaquah or Redmond for services, a gym and pools.

When Sammamish was incorporated in 1999, the first city council recognized that the new city needed all of these things.

Priorities were set on improving roads, adding parks and expanding the library. Building a city hall was a priority, too—the first city offices were in a store front and council meetings used the facilities of the Sammamish Plateau Water District.

While the need for a community center was recognized, this took a back seat to other needs.

The drive to tie up with YMCA

When the city’s attention did turn to discuss a community center, the YMCA and only the YMCA was always at the forefront.

Council Member Kathy Huckabay also sat on the YMCA board. While her advocacy for the Y is not really an issue, others weren’t invited to the table.

In an early community meeting, the Y made it clear that it wanted its branding and its name on the side of any building built with taxpayer dollars.

Considering the tens of millions of dollars at stake, the city’s fiduciary duty would seem to have required discussions with others and a formal RFP.

Initial concept

In 2011, a concept was put forward for a community center that was 98,000sf—2 ½ times as big as the city hall with a potential cost of $64m.

At a community meeting which was formatted as a charette, the participants were instructed by the moderators to not consider or discuss the cost.

At the table where I was seated, so was former city council member Ron Haworth, a fiscal conservative. We thought cost was relevant and ignored the moderator’s directive in discussion and presentation of our table’s conclusions.


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By the time the city was ready to send an advisory vote to the community, the “cost” had been reduced to $25m from the city and $5m from the YMCA.

It is important to note that at the time of the advisory vote in November 2012, there was no negotiated agreement with the Y.

The terms and conditions weren’t outlined and the public was only voting on a concept.

The owner of the Columbia Athletic Clubs at Pine Lake (which is still open) and the Saffron center (since closed) wanted to bid on a management package in which he said he would return 15% of the gross receipts to the city.

His proposal was never given a hearing with the city administration or the city council.

The city’s portion of the community center, $25m, would come from the city coffers. But an important aspect of this was never disclosed to the citizens for consideration for their vote.

Robbing Peter to pay Paul

Don Gerend, a council member from 1999-2017, said the council listened to residents about a community center.

In a post on Sammamish Comment May 23, Gerend wrote, “One of the top priorities, for example, was that the community wanted a community center and we have that now and it is overwhelmingly popular.”

However, residents were not told that the city’s share of the facility, $25m, would come from road funds. This contributes to the gridlock that the residents see today.

Had the advisory vote also asked, “Do you support diverting $25m from road projects for the community center?”, the outcome (a 53%-47% vote in favor of the community center, a spread of 1,400 votes, may or may not have been different.

Approving the contract

The city council approved the contract Feb. 19, 2013, on a 6-1 vote. Member John Curley dissented. Among his objections: the impact on Sammamish private business (the Columbia Health Clubs).

Sammamish Comment published the contract agreement on Feb. 17, 2013. The post included a letter from Arthur Goldman that included these comments from a survey he commissioned:

  • Only 18%of Sammamish citizens support the City’s current approach of assigning the operation of the Community Center without a competitive bid process.
  • When provided 3 options for a community center, the leastpopular choice was the City’s current plan, receiving support from only 21% of the respondents.

The full survey is also included in the Feb. 17 post.

The presentation by staff to the city council and council vote may be seen on the video here.

7 thoughts on “City-YMCA deal was sole-source, no-bid contract, no Requests for Proposals issued

  1. I find the sniping about the Y ridiculous and stupid. It’s over-delivered on expectations and has massive support for what’s it’s done, and continues doing well.
    As for the owner of the Columbia Athletic club, he was never in a position to offer anything close to what the Y offers, there was no way to take his effort seriously. His decision to then spend $50K to campaign against the vote on the Y funding was a better indication of motive.
    This just seems like one more thing for a small group of alleged “concerned” Sammamish decision-maker-wannabes to injure each other with.
    If the Sammamish Y does well enough to support the statewide org to build itself up elsewhere, even for the great value they offer, then more power to them.

  2. I can only speak from personal experience, i joined the current Y when they were located at the church in the south end of Sammamish. I supported the new community center as it opened, however, I was disappointed to find:
    No senior citizen discount (I am 79 yrs)
    The Y did not recognize my AARP Utd Health Care ins coverage that would greatly assist my monthly cost.
    Therefore I withdrew my membership … come on, why is the Sammi Y not trying to help seniors ???

  3. The facility itself is subsidized by all Sammamish taxpayers, and if recent analyses are accurate, at the expense of infrastructure which would benefit many more of us. But I guess the taxpayers’ generosity (albeit forced upon us by a government that stretches the definition of “representative”) just isn’t sufficient for some.

    How about we build a community gas station that could undercut Costco? I’m sure that would get even more “massive support.” Same socialist concept, different commodity.

  4. My family has been ymca members for many years before we moved to Sammamish and few years after. We have a columbia pine club membership for a couple years. I have nothing against the y. The y facility offers a great environnent that Columbia club can’t compete with. I ambivalent about the operation of pools at the y; while very clean, managing demand VS supply has been challenging. The release of online sign up for class openings which parents need to rush to find a spot for their children is far from ideal. I have no idea if Columbia would have done better or worse.

    I do think that the selection process for the operator should be open. Until reading this, I wasn’t aware of the funding of the building construction. There could be more openness by the y about that. And yes us taxpayers through the city should get to oversea how the public funded facility is operated.

  5. I am not sure how the sharing of risk and the potential reward was negotiated but at 25/5, the city should be either paid back the 25 with interest or the profits and losses should be shared somewhere on the order of 83%/17%. – As described, this comes across as a give-away rather than an investment of taxpayer funds.

  6. This is so wrong. The profit should be returned to Sammamish instead of being funneled to other Y’s in the area. We need this money to build our infrastructure. Also, the club is getting so crowded it is becoming less and less useful to residents. Since it’s heavily subsidized by our tax dollars, it’s time to restrict membership to only residents of Sammamish, and maybe even a hard cap on the max number of mbrs.

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