Urban Politics #118: Zoo Non-Profit Governance Agreement


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By City Councilmember Nick Licata.

With assistance from my Legislative Assistant Newell Aldrich on this issue.

Urban Politics (UP) blends my insights and information on current public policy developments and personal experiences with the intent of helping citizens shape Seattle’s future.

________________________________________________________________

CONTENTS:

  • Zoo Non-Profit Governance Agreement
  • Zoo Commission 1: 1985
  • Zoo Commission 2: 1995-6
  • MPD Proposals/State Legislature: 1997-2000
  • Summary Of Zoo Governance Proposal
  • Public Process
  • Update On Long-Range Plan 2001

Zoo Non-Profit Governance Agreement

In early December, the City Council will consider a proposed agreement to transfer management of the Woodland Park Zoo from the City of Seattle to the Woodland Park Zoo Society for 20 years, with a 10-year option to extend.

In some ways, the agreement is more important than the Long-Range Plan 2001 for the Zoo because it commits the City of Seattle to a 20-year financial agreement, which includes financing a parking garage for the Zoo. The garage is considered in the Draft Long-Range Plan, which is expected to be presented to the Council in early 2002, after the agreement is voted on. The Long-Range Plan is summarized in Urban Politics #106 at http://www.seattle.gov/council/licata/up_106.htm.

A public hearing on the agreement is scheduled for December 3 at 5:30 p.m. before the Finance Committee, in the City Council Chambers on the 11th floor of the Municipal Building at 600 4th Avenue, between Cherry and James.

Before summarizing the agreement, I’ll provide historical background to help understand how we arrived at this proposal. The exact text of the agreement isn’t set in stone, so there may be minor changes by the time of the public hearings.

Zoo Commission 1: 1985

In 1985, the first Zoo Commission was convened to evaluate the Zoo’s operations and needs. The commission recommended that a capital program for the Zoo be financed through a regional voter-approved tax. A Countywide $31.5 million bond was placed on the ballot and passed with a 66% “yes” vote. The Zoo Society contributed $10 million over ten years to complement the capital bond, resulting in a construction program over $40 million.

Zoo Commission 2: 1995-6

In 1995, Mayor Norm Rice appointed a 50-member Zoo Commission 2, composed of legislators, business, labor and community leaders to evaluate the Zoo’s performance over the last ten years, and make recommendations on the Zoo’s future funding, development, management and governance. They issued the “Zoo Commission 2″ report in January, 1996.

The report asserted the Zoo had been “a de facto regional entity for at least ten years” and that “City management is no longer appropriate for this regional facility,” and recommended “that the Zoo become a regional, special-purpose entity with a unitary management structure and dedicated regional taxing authority, in an enhanced partnership with the Woodland Park Zoo Society.” Specifically, it recommended:

· a County-wide $11 million annual levy, or other dedicated, regional funding source, to eventually replace annual City of Seattle funding of $4.5 million; $2 million for increased operations, maintenance and program supportÉ.and $4.5 million for capital improvements and future program, operations and maintenance needs.”

· a regional governing board worked out by Seattle, King County, and suburban jurisdictions (to include the Zoo Society), and laid out a list of options, from designating the Zoo a separate City department, to a regional agency, to a public-private hybrid organization, to non-profit management by the Zoo Society.

In support of these recommendations, in July 1996, the City Council passed Resolution 29386. The resolution placed two City of Seattle representatives on a task force to make recommendations “regarding the most favorable regional governance structure and funding mechanism.”

Such a regional committee was formed, but its work did not bear fruit, and the City eventually stepped back from the effort to find regional funding and governance solutions for the Zoo, and instead focussed on finding a dedicated funding source and exploring other governance options.

MPD Proposals/State Legislature: 1997-2000

The first attempt to implement the recommendation for a dedicated funding source lay in the Zoo Society (and later City’s) attempt to gain the state legislature’s approval for a Metropolitan Parks district (MPD), as described in UP 58 and 59 from 1999 (links below), as a funding source for both the Zoo and parks generally.

http://www.seattle.gov/council/licata/up58.htm
http://www.seattle.gov/council/licata/up59.htm

The City and Zoo Society were ultimately unsuccessful in achieving the changes to state law they considered necessary for a viable MPD in Seattle. In 2000, the City opted to pursue a change in state law to allow for non-profit management of the Zoo and Aquarium. This was successful; in 2000 the state legislature passed RCW 35.64, which led to the current proposal, described below.

Summary Of Zoo Governance Proposal

The agreement is for 20 years (with a 10-year option), and has several sections, as listed below:

Ownership

City would retain ownership of the Zoo property and facilities. However, ownership of Zoo animals and personal property (office furniture, computers, etc.) would be transferred to the Zoo Society. This is similar to the ownership of the Arboretum, where the City owns the land, but the University of Washington owns the plant collections.

Funding:

· The City would contribute $5 million annually of General Fund revenue, plus an annual escalation of 70% of the increase of the Consumer Price Index for Seattle-Tacoma. The City contribution could be lowered during a fiscal emergency.

· Maintenance: the City would pay the Zoo Society $500,000 annually, starting out as in-kind services for the first year, transitioning over six years to straight cash payments.

· Major maintenance backlog: the City would transfer $6.4 million over 7 years to the Zoo Society; this is around 60% of the $11 million major maintenance backlog estimated by the City’s Budget Office.

These major maintenance payments are contingent on the Zoo Society providing $2.50 match for each $1 the City provides. If the Zoo Society does not raise sufficient funds to meet the match requirement in any year, the City will not be obligated to provide the funds.

· Levy payments: The City will provide $2.5 million annually from the current parks levy (from 2001-8). If the City does not pursue renewal, or a renewal levy fails and the City does not supply $2.5 annually from another source, the Zoo Society can terminate the agreement.

This adds up to an average of just under $9 million per year in City contributions. According to the City’s Finance Department, the agreement is budget-neutral, assuming the City would construct the garage even without the agreement. We will be exploring the budget issue in greater detail.

The Zoo budget for 2001 is approximately $14.5 million, and comes from a combination of the City General Fund (including Charter revenues), admissions, parking, levy dollars, and membership sales and other fees. The different components vary according to, for example weather, which lowers admissions and necessitates higher General Fund contributions.

Parking Garage

The City would agree to finance a parking garage for the zoo to bring the total number of public parking spaces to 1450 (currently there are about 650). The City would issue bonds, to be paid by

· Parking revenue beyond the current total received by the Zoo (around $500,000 to $600,000 per year)
· Of the remaining amount, the City would pay 34 of the balance, the Zoo Society 14

The garage is currently estimated to cost around $25 million, depending on location, and how much is built below ground. This translates into an estimated $1.4 million annually to pay off the debt service over 30 years, although these figures are rough estimates.

Further, the City and the Zoo Society agree to conduct a study to address traffic and parking issues raised in the Environmental Impact Statement (EIS) for the Long-Range Plan (available at http://www.zoo.org/eis1.htm), to be paid for by the Zoo Society. The study will examine the size of a parking structure or structures, locations, estimated costs, and net revenue expected. Only then will the cost-and exact nature of the City’s financial commitment–be known.

RPZ (Restricted Parking Zone)

The City would agree to not institute an RPZ or other parking restrictions in the area around the Zoo until construction of additional parking to replace the number of parking spaces lost to the Zoo by such restrictions.

Long Range Plan

The agreement assumes the adoption of the Long-Range Plan by April 1, 2002. If an agreement acceptable to the Zoo Society is not adopted by then, the Zoo Society can terminate the agreement.

Admissions

The Zoo Society will have the authority to set admissions charges (the City Council currently does), provided the Zoo remain accessible to those from all economic levels. Admission prices “should reflect market rates for comparable attractions and not increase by more than the rate of inflation being experience by the Zoo.”

Admission fees are currently $8.50 for King County residents aged 18-64, and $9.50 for non-King County residents, and $6.25 and $7.00 for youths, with other rates for seniors, preschoolers and free admission for toddlers.

Zoo Employees

The agreement calls for a transition plan to be developed by the end of 2002 to transfer City employees to the Zoo; Zoo employees are currently split between the City of Seattle and the Zoo Society.

According to the Parks Department, of the 388 current Zoo staff members, there are 229 City employees and 159 Zoo Society employees. Only those employed by the City would need to transition.

Revenue

All revenue collected by the Zoo Society at the Zoo, including admissions, concessions, souvenirs and services, shall be expended or invested by the Zoo Society for Zoo purposes.

Termination

Either party can terminate the agreement immediately if the other defaults on provision of the agreement- provided they have 60 days to take action to cure the default.

Neighborhood Liaison

The Zoo Society agrees to designate a neighborhood liaison from both the Zoo Society Board and the Zoo Society staff to communicate with the Phinney Ridge, Wallingford and Greenlake communities on a regular basis.

Other sections include provisions on naming rights, annual reporting and audits, access, and public involvement.

The agreement does not explicitly address:

· Parking rates, which are currently $3.50, and set by the City Council. Under the agreement, they would be set by the Zoo Society. · When or if RPZs would be done, or the City’s commitment to do them (there is no funding in the 2002 budget for City-funded RPZs).

In any case, the higher rates are set, the more likely people would avoid the garage and park in the neighborhoods, prompting greater pressure for an RPZ. The lower the rates, the greater the share of debt service the City likely need to pay.

THE ZOO SOCIETY

The Woodland Park Zoo Society is a non-profit involved in Zoo affairs since its inception in 1965. The Zoo Society constructed and operates the food court and zoo store, and does marketing for the zoo.

The Zoo Society has contributed more than $20 million to the zoo over the last decade for exhibits and educational programs; they have indicated they are committed to generating $60 million more.

There are over $20 million in projects listed in the City of Seattle’s Capital Improvement Program for the Zoo that list private funding as the source, including the carousel, Discovery Village phase 1, and new office building. These would presumably be funded by the Zoo Society.

Public Process

The Finance Committee of the City Council will hold a public hearing at 5:30 p.m. on Monday, December 3, in the Council Chambers on the 11th floor of the Municipal Building, at 600 4th Avenue, between Cherry and James. The Committee will meet two days later to consider the agreement, with a vote at the Full Council to follow.

The Board of Park Commissioners will also participate in the hearing, and will make a recommendation to the City Council. The agreement was presented to the Board on November 8.

Text Of Agreement

The Executive Summary and full version of the agreement are available at the Zoo website at http://www.zoo.org/exec_sum.html . The full version of the agreement can be downloaded there in an Acrobat PDF file; if you want a Word copy of the agreement, e-mail my legislative aide Newell Aldrich at newell.aldrich@seattle.gov .

Update On Long-Range Plan 2001

The Long-Range Plan 2001 and Final EIS will be presented to the City Council in early 2002.

The text of the draft plan and draft EIS are available at http://www.zoo.org/eis1.htm .

Urban Politics #106 provides information about the Draft Long-Range Plan 2001 & Draft EIS, at http://www.seattle.gov/council/licata/up_106.htm .

Since UP 106, the following revisions to the plan have taken place, in response to public hearings on the plan and Draft EIS, and traffic and parking workshops carried out by Parks, the Zoo, and the Board of Park Commissioners:

· Both the options for the garage and Discovery Village have been revised to comply with the current land use code height limits of 30 feet;
· Options for the parking garage were added, including one to the west of Aurora Avenue, and an option for a mostly below-ground garage in the current south parking lot.

Keep in touch…

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