Neal seeks answer to where the money went
Merriam City Council - July 23, 2018

The email response from the Merriam Assistant City Administrator to a question by Councilmember Neal about the apparent discrepancy between aquatics amounts in the actual project budget as disclosed during a Council Work Session on July 16, and the Master plan budget which forms the basis for the funding approved by voters during the September 2017 special election resulted in a troubling answer.

Reading past the counter factual 'spin' shows that the internal staff team made the decision themselves to combine separate indoor and outdoor aquatics equaling $10 million into the $4.4 million outdoor aquatics 'bucket,' thereby freeing up $5.6 million.

Transcript of Neal Questions
Merriam City Council - July 23, 2018

The following is a transcript of the question and answer exchange at the Merriam City Council meeting on July 23, 2018 when Councilmember Neal attempted to question Assistant City Administrator Meredith Hauck about the decision by her team to downgrade the Master Plan aquatics budget by at least $5.6 million.

Councilmember David Neal: In the original master plan, my understanding from looking at the original documents was that we had a budget that you showed... (Can you scroll it back?)... construction costs of $25.547 million and I asked a few days ago for a breakout of what that was... and looking in the master plan it shows that we had a construction budget of $17 million for the 'community center and indoor aquatics'. We also had a line item for outdoor aquatics of $4.425 million for the outdoor portion. Then in the work session, I heard that the project budget actually was $4.425 million for the total aquatics, both indoor and outdoor. Is that correct?

Assistant City Administrator Meredith Hauck: So that is the budget for the deck space of the pools. And as I said in my email response to you, the issue of this budget that they proposed is that they initially had a concept for indoor aquatics and a concept for outdoor aquatics and those were priced separately. And when the community said we actually want both, those numbers were just combined into one, so there was an overlap in those numbers. And so our goal with the budget that we're using of $4.4 is to adjust aquatics amenities with other space that was initially included in that conceptual amount [that] we've included in the community center budget now. So there are multiple budgets, but we have maximized the amount of money we are spending on actual aquatics features on the deck.

Neal: What is included in your definition of 'aquatics amenities' and what is included in the portion that is now included in the building that was part of the outdoor budget?

Hauck: So, locker rooms are included in the building, party rooms, lifeguard space, pool equipment, pool storage, those are all part of the Community Center budget where before part of that was in the outdoor budget.

Neal: In looking at the details, so what [cost] that was indoor aquatics is now part of the outdoor aquatics budget? Which indoor aquatics have you moved to the outdoor [budget]?

Hauck: It's actually the other way around. Some of the outdoor has moved as part of the community center budget, not outside of that $4.4 million for just aquatics.

{Neal realizes that getting Hauck to admit to the rest of the City Council what she disclosed in her email to me that the cost of the indoor pool and indoor aquatics amenities will now be paid for by folding the cost into the $4.4 million overall aquatics 'bucket' which was the same amount as the outdoor aquatics budget in the Master Plan. Where did the $5.6 million indoor aquatics money go?}

Neal: How much?

Hauck: I don't know off the top of my head because those are conceptional amounts needed to hit the $4.4 million budget number for actual aquatic amenities, not support items.

Neal: (shakes head in frustration)

Hauck: So like slides, lap pool, anything you're seeing on the deck space is part of the $4.4 million.

Neal: What about the pool?

Hauck: Anything with the pool and deck space, so anything located in the outdoor pool deck space including the all the pools and anything located in the indoor deck space -- slides, lazy river, therapy pool, all the water and deck space is included in the 4.4 million dollars.

Neal: So in the master plan we actually had -- it looks like -- for essentially the pool you had about $4.485 million in that table which shows the outdoor features. You also had an indoor aquatics [table] which if you -- depending on the size of the indoor aquatics -- the bulk of the costs was showing up in the pool amenities of more than $5 million dollars and so $5 million and $4 million is about $9 million in aquatics. It seems that now that has been shrunk down into the $4.4 million?

Hauck: Sure, so I think the challenge is -- our goal is to maximize $4.4 million in aquatics amenities as part of this project and deliver on the programming areas identified in the master plan. So we knew what type of amenities we needed to provide, not only in the pool, but throughout the rest of the building...

Neal: (eye roll at not answering his question)

Hauck: ...and so like I explained in my email when we had... so these costs assumed we would be at the midpoint of construction right now, so we actually have about a year and a half more inflation to go, we have site conditions we needed to accomodate as part of the budget, so even though these numbers are really a starting point for us, where we stand today is that we have an entire community center worth of amenities that we need to fit into a $30 million dollar budget and so our goal is to say "we needed lap pools"...so just to skip to this slide as the talking points for this... Here's everything we needed to include in the aquatics area and we were able to give you conceptual site plans that are delivering on these programming requirements.

{displays slide entitled "Design Direction"}

DESIGN DIRECTION

• Lazy River
• Zero Depth Entry
• Water slides – at least one for 48” + and one for little kids
• Spray features
• Indoor lap lanes
• Outdoor lap lanes that can accommodate the swim team
• Therapy pool
• Two 1m Diving Boards

Other Components

• Appropriate deck space for amenities
• Amenities spaced so that all users can have enjoyable experience
• What goes inside (365 days) vs. what goes outside (90 days)

Hauck: ...Here's everything we needed to include in the aquatics area and we were able to give you conceptual site plans that are delivering on these programming requirements. And so while some of the numbers between the buckets may have changed, essentially we have provided on the programming direction as provided by the master plan.

Neal: So my concern essentially in the master plan we provided somewhere between (depending on how you look at it) between 8 and 9 million [should have said between 9 and 10 million] dollars worth of aquatics amenities and now because of additional costs -- the inflation cost which based on your email to me was an additional $2 million dollars, and approximately $900,000 for additional excavation costs because the site is more difficult -- it looks to me like money was shifted out of aquatics by putting all of aquatics into what before was the outdoor aquatics budget. Now we're building the indoor aquatics and the outdoor aquatics with about half the money.

Hauck: So, I think what's important to remember about this building is we're actually building a full service community center and so we are happy to shift that money back into aquatics if you would like to take out other features that's in the building. That's the reality of the budget situation. We've tried to the best of our ability to maximize how we are able to deliver on this list of project amenities. If that direction has changed or the budget direction has changed, we are happy to look at that. This is our attempt to deliver on time and on budget the list of amenities that were provided to us as part of the master plan recognizing that the design and budget were just conceptual.

Neal: So you have said "our" -- who is "our"? Hauck: The design team.

Neal: That would be who specifically?

Hauck: That would include McCarthy, the architect, Anna and her team, the work of the design committee...

Neal: OK, well..

Hauck: ...input from the library in order to provide space for them on the site. I mean it's a number of stakeholder groups who've been part of that conversation.

Neal: They were all aware that the money going into the aquatics was going to be significantly less because of the additional costs elsewhere that we've run into?

Hauck: So even though the 4.4 -- I think you are looking at it -- that money was just a conceptual bucket that we were given as part of the conceptual design. When we actually get into how do we actually build on this site, the numbers change a little bit. We say we need meeting space for 250 people, that has a number. When we say we need a high school size gym that accomodates all these sports, that has a number too. And so yes as part of the design process, that's why we have a team of professionals who can say how can we make all of these competing interests align so we are delivering on the overall programming of the site -- not just saying we are going to spend 'x' number of dollars in one area to the detriment of everything else in the program.

Neal: But if the money -- if the cost shifts significantly out of one 'bucket' and what the voters voted on was this master plan, then I think that that requires a look by the community again to make sure that that's what we want to do.

Hauck: So, my understanding is that the voters voted on this list of proposed amenities with an overall budget of $30 million dollars delivered in 2020. That's what was considered as part of the ballot initiative. And so at the staff level, we didn't feel that it is our perrogative to take anything off of this list but instead to deliver on all of these items. We're presenting a plan that does.

Neal: (shrugs and shakes head in frustrated resignation at the 'spin' provided in response to his questions)

Councilman Bob Pape:

And you keep saying that Meredith. I understand what you are saying but even myself when I thought we were getting... I read outdoor pool with spray pad, lap lanes and leisure pool, lazy river and slides, etc. That's in the outdoor portion. I thought the outdoor portion was going to have that. And I know that stuff is going to be inside and I get [that] doing that inside is going to be year round, but everybody that keeps coming and talking to me says we're not going to use that inside. We want that stuff outside. And that's what we promised!

Hauck: So, we're happy to make that accomodation if you can help us decide which of these other ammenities need to be taken off the list... or unless more money comes into the budget. Unfortunately that's the reality of the situation. But I think we're here tonight looking for your feedback on how are these amenities distributed throughout the aquatics space. The reason we put what we put where was because we know that in order to sustain our business plan goals and to minimize the subsidy that we are using from our city budget to subsidize this budget, we need to have a thriving and profitable indoor pool nine months out of the year and not have everything outside which just is open two and a half months out of the year. So if we create an indoor pool that doesn't deliver and keep people coming year round, it really doesn't honor the business plan that we've put forward.

Councilman Christine Hands:

Can we move forward and see the new options that have instead of just focusing on buckets ___________ (trails off, unclear)

Neal: I would like to close and say that I think it's important that we understand that what this plan appears to be doing is -- we've had almost three million dollars of additional costs that were not forseen or were 'not known' or whatever and...

Hauck: (interrupts) It's a reality.

Neal: A reality. So we're taking them disproportionately out of the aquatics in my opinion and I think that's something that the community needs to have an input in.

Mayor Ken Sissom:

I see what you are saying. I don't know if that's necessarily the opinion that everybody has up here but... Again, staff has had a pretty difficult job because we've limited... actually the solution to that is to spend more money which we are not going to allow them to do. So we can't ask them to build a building that is going to cost more than what we have to spend unless we give them the authority to spend more money or we're to tell them OK we're going to move all this stuff outside and tell them what we're willing to give up. Again, what good is an indoor pool that doesn't have anything in it? What good is an outdoor pool in the winter time? It's a give and take. That's kind of where they're at. That is why we need these people to try and get the most -- to do what they can with the money that the community has.

Sissom (continues): OK, let's go ahead and move forward.