By Pepper Parr
September 9th, 2019
BURLINGTON, ON
When John Birch was the President of the LaSalle Park Marina Association he was pretty sure he saw some light at the end of the tunnel.
Birch has been like a dog with a bone on the issue of getting the Marina the support it needed from the city. The organization wasn’t looking for a handout. They have an enviable record for the way they have held up their part of the bargain on the Joint Venture Agreements with the city.
Birch wanted to see a permanent wave break built and fought that battle for close to a decade. He lost.
John Birch weathering the storms.
Unfortunately for Birch the LPMA had a special meeting on July 3rd and voted him out as President of the organization. He did not go willingly but has accepted his new fate. He attends all of the committee and council meetings that dealt with the LPMA wave break and governance models but sits at a healthy distance from the rest of the crowd.
Politics is a blood sport and the LPMA issues were very political – Birch did his best and much of the success for getting the wave break problems to where they appear to be going is due to Birch. You don’t have to love him – but you do have to respect what he got done.
Many in the city see the Marina as a place for the rich to play with their toys. The record shows that the membership is made up of typical upper middle class people in Burlington.
There is an element in Burlington that does not want to see a marina paid for by taxpayers. What many fail to accept is the LPMA has carried the weight on the operation of a marina that has public access for anyone who wants to launch their boats.
On September 29th, Council should get a report from the Standing Committee of September 9th, which basically says the best deal out there for the city is to sign a new agreement with the LPMA.
LaSalle Park Marina as it looked in early 2019 – 219 slips with wave breaker and docks that have to be brought ashore every winter.
The recommendation is that the city finalize a long-term licence agreement with the LaSalle Park Marina Association for the operation of the Marina at LaSalle Park substantially in accordance with confidential document council will see. The agreement is based on Council’s approval of the purchase of a new floating wave break that is going to come in at a cost of about $4 million of which the LPMA will pay about $2.7 million over the term of the license agreement.
The city spent a considerable amount on several studies, one of which set out various governance models. The report from the consultants suggested that finding anyone who would take on the marina operation either as a public marina – City owned and operated, direct management contract, profit sharing management agreement or a Public/Private marina or a Private marina or something that is an Arm’s Length operation of marina – just isn’t in the cards.
The purpose of the lengthy report, with tables on every conceivable cost, took a look at:
Other potential operating models for the LaSalle Park
The dream wave break for many at the Marina was something permanent – it wasn’t to be.
Provide staff’s evaluation of the operating models and a recommendation for a Marina operator
Seek Council’s approval to enter into a long-term licence agreement with the LaSalle Park Marina Association for the operation of the Marina
Satisfy any outstanding staff directions related to the Marina
To summarize LPMA’s overall contribution to the new floating wave break, and
Finalize any operational requirements as the current agreement between the City of Burlington (City) and LPMA expires on October 31, 2019.
The LaSalle Park Marina Association has been involved in the operation of the marina since 1980 . They currently have a Joint Venture Agreement with the City that expires at the end of October 2019. The Marina has 219 slips and is protected by a floating wave break. The Burlington Sailing and Boating Club (BS&BC) and the Able Sail program are separate entities that offer sailing programs at the Marina. In addition, the City has a public boat launch at the Marina that is protected by the floating wave break.
LaSalle Park – getting a boat lined up to be set in the water – the beginning of a new sailing season.
The current wave break has reached the end of its useful life. The LPMA wanted to see a permanent wave break but ran into problems with the cost and an inability to work out an acceptable plan to protect the boats with the Trumpeter Swan Coalition who want to ensure that the swans are not disrupted.
Over this past year Committee has received three reports related to the Marina one of which was a report on alternative governance models for the Marina with the following staff directions:
Table city manager’s office report on alternative operating models for the Marina at LaSalle Park to the Committee of the Whole meeting on September 9, 2019 at which time staff will provide a recommendation on a preferred operating model for the Marina.
Staff secured the services of a consultant, TOURISTICS, to undertake an analysis of potential operating models for the LaSalle Park Marina.
Following the Committee meeting on July 8, 2019, the consultant revised the report to reflect the discussion and direction staff received. This included:
Increasing the annual license fee for the Marina operator, reducing the amount for annual maintenance for the floating wave break and eliminating costs for the Marina operator related to the removal and installation of the docks each year.
An Overview of LPMA’s operation and financial information
Comparing LaSalle Park Marina with other marinas based on the features and value of amenities
Outlook for future slip occupancy for LaSalle Park Marina
Information and financial data related to all aspects of LPMA, Burlington Sailing and Boating Club and Able Sail
Financial viability of LPMA’s current operating model
Outlines several different operating models along with financial implications to the City including:
Public marina – City owned and operated, direct management contract, profit sharing management agreement
Public/Private marina
Private marina
Arm’s Length operation of marina
The consultant’s report identified that, based on the limited services and amenities available at LaSalle Park Marina along with the limited number of slips, a private operator would have challenges meeting its financial goals and would not consider the Marina at LaSalle a viable long-term business.
LPMA membership was healthy but a concern about not being able to get insurance due to the condition of the wave break threatened that membership.
Based on the data and research presented by TOURISTICS, it appears to staff that continuing the relationship with LPMA to operate the Marina is the most economical and feasible option for the operation at LaSalle Park. Given LPMA’s longstanding commitment to the Marina, its volunteer capacity and involvement with supporting the operation, the Marina’s limited amenities and limited number of slips, this is the preferred model that has the least impact on the taxpayers of Burlington while leveraging community support to maintain the Marina in the City.
Staff and representatives from LPMA met on a regular basis to negotiate a new licence agreement for the use of water lots and the operation of the Marina behind a new City owned floating wave break. Staff and representatives from LPMA have agreed in principle on a draft agreement and the volunteers should be recognized for their time and effort in finalizing the document.
The water lots are owned by the City of Hamilton. Burlington tried to purchase those water lots but a price could not be agreed upon.
Staff recommend the existing agreement with LPMA stays in place until October 31, 2019 and to start the new licence agreement effective November 1, 2019.
LPMA is committed to the Marina being publicly accessible and affordable and will be making a presentation to demonstrate their support of this.
With the existing Joint Venture Agreement with LPMA coming to an end, there are a couple of housekeeping items that need to be addressed including the disbursement of the City held reserve funds to LPMA charter members and undepreciated senior members. Additional information related to the reserve funds is included in the financial section of this report.
The area in green is land owned by the city of Hamilton. North Shore Blvd runs through the property with the LaSalle Park Arena jutting out into the lake.
Should Council want to consider an alternative operating and governance model for the Marina they will have table after table that break down the costs for each operation.
The very tight timeline would not preclude LPMA from submitting a proposal to operate the Marina.
The timelines do present uncertainty for a new Marina operator and boaters related to the 2020 boating season. The new operator would need to start marketing the Marina to boaters during the winter and then have all facets of the operation in place for April/May next year. The timelines would not position a new Marina operator for success in 2020.
A lot of money has been spent getting to this point. There has been a rigorous inspection of all the issue, something that had been lacking.
The city did find a reserve fund they could raid – how the Hydro Reserve Fund gets to be used for a marina wave break replacement is one the politicians will have to explain).
There will be a $2.1M (which could rise to $2.7) repayment by the LaSalle Park Marina operator through an annual licence fee.
They are going to have to negotiate a $500,000 contribution for the LaSalle Park Marina to the wave break, electrification and/or finger docks as part of the negotiation on a renewed agreement .
The City Manager will consult with the LPMA and make recommendations to Council of compensating LPMA for costs they have incurred to date in leading this project.
In finalizing an agreement with LPMA, staff reviewed the financial assessment completed by Accountants Grant Thornton did a financial assessment to ensure that revenues and cost assumptions were up to date and are reflective of the conditions in the licence agreement.
Key Assumptions made were that:
• Revenues forecasted at a 1% growth with a stabilizing occupancy of 93%
• Expenses are forecasted at 1%, include;
o Maintenance of docks, walkways etc.
o Assumption for future electricity costs should electrification of docks proceed
o Portion of water lot fee to Hamilton Port Authority (24%)
o Repayment of joint venture loan (balance owing $225,000 over 7 years)
o Payment of a licence fee to the City
Based on the above assumptions the financial forecast as provided by Grant Thornton shows that LPMA is financially sustainable.
Financial sustainability is achieved as a result of LPMA sustaining day to day operations, reserving funds for future replacement of Marina infrastructure (docks, walkways) and being able to provide an annual licence fee to the City.
As per Council’s direction, the agreement with LPMA includes an annual licence fee which is estimated to generate $2.7 million over 25 years and exceeds the minimum $2.1 million repayment required by the City.
LPMA maintains a reserve fund balance of approximately $406,372 which is earmarked towards the electrification of docks and general improvements to the Marina. As per the licence agreement, should electrification of the docks not occur within a specified time period, $350,000 of LPMA’s reserve fund balance will be provided to the City as their upfront contribution to the capital cost of the new wave break. It is financially prudent that the remaining balance in the reserve fund should remain with the LPMA to provide them with financial flexibility for operations and general improvements to the Marina.
Staff do not recommend that LPMA be reimbursed for costs leading up to this project. To date, LPMA has put forward $150,000 for their share (50%) of the Environmental Assessment (EA) and Recreational Boating Feasibility and Capacity Study. Those costs were incurred by LPMA and the City as a requirement to replace the existing wave break structure and should not be reimbursed as LPMA benefits from the new floating wave break.
As part of negotiating the licence agreement, LPMA will continue to review opportunities to increase revenues and manage costs. Option that will be explored for feasibility are pay for parking, public boat launch fee and fee structure.
Over a 25-year period the City’s overall known cost of the new wave break would be $4 million in upfront capital, plus an annual operating cost of $20,000 for a total cost of $4.5 million. It is estimated that LPMA over that same period can pay the City up to $2.7 million through a licence fee, resulting in a net city cost of $1.8 million.
For committee’s information, the $2.7 million being paid over 25 years would be equivalent to a loan of $2.1 million at 2.25%. In effect, the City is realizing a capital contribution from LPMA of $2.1 million, plus an implied interest recovery of $0.6 million.
Getting to this point has not been cheap. The City’s funding, excluding the tender award has been as follows:
• $150,000 Environmental Assessment and Recreational Boating Feasibility and Capacity Study (50% cost share with LPMA)
• $72,600 Grant Thornton Wave Break Viability
• $21,500 Grant Thornton Financial Assessment Floating wave break
• $25,000 TOURISTICS Report Potential Operating Models (Estimate)
Is all this more than the city spends on the Performing Arts Centre or the Art Gallery or the cost of running the arena?
Burlington is a lakeside city – it should perhaps have a marina; now to find a way to add some amenities – parking and maybe even a small café with a licence.
Ia the Marina just a nice-to-have? Something the Mayor cautioned against again and again when she was a Councillor with an eye of the Chain of office.
Interesting how things change.
Mayor Meed Ward is trying to put lipstick on the pig. Re-branding won’t make it a community marina.
Not when the sign says “PRIVATE DOCKS BSBC USE ONLY” at what is supposed to be a public boat launch.
I listened to the council meeting this evening and I question the viability of a Marina that is run by volunteers. Having been involved with many volunteer organizations over the years there is a definite shift away from the amount of time retired people are willing to donate to volunteering.
Many organizations are dealing with having to change their programs because of the lack of people willing to commit for long periods of time, especially on a weekly basis. Some programs are lost and in some cities their Councils have accepted the fact that they have to either hire people to run and change the programs or switch the programs to paid city staff who work in their Senior Centres.
Having volunteers manage the Marina is like building a “house of cards”. Look at the mean age of the people volunteering presently. The one question that should have been asked tonight by Council is what are the ages of the volunteers presently involved?
Younger adults don’t necessarily have the time to volunteer. In most families both mothers and fathers are working. They have children and many have their children involved in sports etc. They are stressed to the max.
It is my opinion that Parks and Recreation could take this on as an opportunity to offer courses on sailing, boating and water safety, and perhaps even sailing camps in the summer for children. Community Centres could be used in the off sailing time to run classes etc.
There could also be nature courses involved with the Trumpeter Swans who make this area their home, and information forums to encourage children and residents on how we can work towards making Burlington a “greener city”. I would guess that Burlington Green would be willing to participate in something like this if programs were offered by Parks and Recreation.
When there was a board of directors at the Senior Centre we suggested that golf courses could be offered at the Centre to help seniors improve their golf games. It would be a great way to have classes using the city owned Tyandaga Golf Course pros. This worked out extremely well. The courses were offered when it was a down time for the pros at the Golf Course and they proved to be very successful. This then morphed into exercise classes for golfers.
If Parks and Recreation, and Council really want to make LaSalle Marina more of a place for Community then I would ask that they perhaps look into partnering with the volunteers of LaSalle Marina, Sailing Clubs and Burlington Green.
It’s time to think outside the box.
So many errors.
1.The marina is not financially sustainable. It will need another $4.0 million (plus inflation) infusion of tax dollars when the 2020 wavebreak need replaced in 2045-2050.
2. The City Staff was directed to evaluate alternative funding. It should not be up to LPMA to decide if pay for parking or boat ramp fees are needed. Hint there should be pay for parking for the people who use the boat ramp, kills two birds with one stone.
3. Water lots are rented from the Hamilton Port Authority, a Crown corporation, not the City of Hamilton. Its a long term lease with extensions already agreed upon. The park itself is rented from the City of Hamilton at I believe a $1/yr. Previous council couldn’t come to agreement with Hamilton on transfer of ownership. That lease runs out in a couple of years.
4. The way to add amenities was to expand the marina to 300+ slips as LPMA originally proposed. That was a key part of their funding model it would provided the revenue that is needed to make marina sustainable. They showed they could afford $4.0 million. What they wanted was another $8-10 million of non-existent Federal and Provincial funding to have the Rock wavebreak,
5. Haven’t you heard there is a climate change emergency? Why would anyone add parking?
Let them use public transit and bikes. That’s the way the new council rolls.
6. LPMA and City Staff never tried to work out a plan about the Swans. That’s why the Trumpeter Swan Coalition objected to the Environmental Assessment. There still is no written plan on how to deal with the Swans although some sort of agreement has been reached that will allow them to be fed if the wave break causes the area to freeze.
At least you got this right.
Mayor doesn’t want to be seen as killing the Marina, it wouldn’t be good for her future political ambitions. So she’s raiding reserve funds and sticking future councils/taxpayers with the tab.
Raiding reserve funds is the go to move of the new council, and they still can’t get tax increases below the rate of inflation.