Report on the Presentation of the Scarsdale Community Center Proposal to the Village Board on Tuesday Evening, November 18^th.

On Tuesday evening, November 18^th, the Scarsdale Community Center, Inc. (SCC) presented to the Village Board the results of studies conducted during the prior six months of possible sites for a community center, projected utilization, corresponding revenue and expenses and a financing proposal.

Larry Bell, Vice President of the SCC, opened the meeting at Village Hall addressing the question of why  we are discussing building a discretionary facility during this time of economic distress.  He answered the question by reference to the many steps the project has gone through already and the many steps that remain before the facility can be built.  He estimated that two years of planning, designing and fund raising is required prior to bonding and constructing the facility.  He emphasized that now is the right time to continue with the planning efforts and that by the time the project is ready for bonds to be issued it is likely the economic environment will be improved.

Joel Bargmann of Bargmann Hendrie + Archetype, Inc., a Boston based architectural firm engaged by the SCC, reported that his studies indicate that there are three viable sites for the community center, namely, the Outdoor Pool area, the leaf transfer area at Crossway and the Harwood site next to the Scarsdale library.  He indicated that the Harwood site is the preferred site due to its central location within Scarsdale, its proximity to the high school and library which creates a good community complex, the fact that the site does not contain any existing use that would need to be relocated, it has the lowest development costs of the sites studied and it ranked the highest on a broad range of selection criteria that his firm examined.  Mr. Bargmann estimated that the proposed 32,000 square foot facility would cost $15 million.

Ken Ballard of Ballard*King & Associates, a Denver based facility planning and operations consulting firm engaged by the SCC, presented a detailed market analysis and financial plan.  The financial plan was based on an increase of family membership fees to $938 from the $625 fee level first established in 2002.  His projections showed positive cash being generated in each of the first five years of operation and a cumulative reserve build up of $1.5 million at the end of five years after deducting a $1.0 million expense contingency.  Ballard commented that he has never seen the level of due diligence and fact checking on a project that has been done by the SCC.  He also commented that his firm has worked on over 400 similar community projects and he has never seen membership commitments with cash on deposit for membership fees the way Scarsdale has done. 

Steve Bush, the SCC Controller and an Executive Vice President and Chief Financial Officer of Apple Bank for Savings, presented a plan for financing the project.  He proposed funding the $15 million cost with a Village backed $10 million bond issue and $6 million to be raised privately through a planned capital campaign.  The extra $1 million would be used to pay capital raising costs, pre-opening costs and the balance to create an opening reserve. He referred to a similar financing arrangement used in Mamaroneck for a library expansion and renovation for which a ground breaking was held on October 27^th.  That $20 million project is being financed by a $15.5 million village bond issue and a private capital campaign which has raised $5.1 million to date.  Mr. Bush emphasized that the proposed $10 million Scarsdale bond would be paid for from community center operations.  Bush presented a detailed analysis to demonstrate that Scarsdale could issue the $10 million bond as well as the schedule of anticipated bond issues for other purposes and still not jeopardize the Village’s Aaa bond rating.  He also emphasized the safety factor built into the projections and the fact that the proposed Center could withstand a 20% shortfall in revenue and still cover debt servicing requirements from the Center’s operations.  Finally, he made the point that the SCC facility would enhance all property values in Scarsdale with no cost to taxpayers.

Neil Bicknell, Chairman of the SCC, closed the presentation portion of the meeting asking the Village Board to accept the community center as a project that the community wants built and to partner with the SCC to resolve open issues of site selection, financial plan and the project timeline.  He indicated that approval of a site and Village Board commitment to a financing plan are prerequisites to a private capital campaign. 

The meeting continued with questions from the Mayor and Trustees concerning the SCC’s proposal.  David Irwin asked about the current paid membership level (1170) and when the membership was acquired (2002 through 2005).  He asked if consideration has been given to adding to membership.  Mr. Bicknell responded, “No” explaining that the membership campaign was undertaken to demonstrate that sufficient support exists within the community to substantiate the financial projections and to give assurance that the Center can be self-supporting.  He indicated that that objective had been achieved and that no further requirement for demonstrations of membership support is appropriate until there is a commitment from the Village that the project will move forward. 

Noreen Fisher referenced neighborhood concerns about the traffic volume in the area and asked the SCC to provide any data concerning Center usage that would be helpful in assessing traffic impact.

Miriam Flisser asked about the main source of revenue that makes the Center work financially.  Steve Bush replied that the combined impact of updated membership rates and financing 40% of the project cost with private capital, rather than the previous proposal of 100% debt financing, substantially improves the strength of the financial results.

Dan Hochvert asked if salary comparables from other community centers are available to validate the salary levels used in the projections.  Mr. Bush responded that comparable salary and other expense rates from other centers have been examined and, for instance, the lifeguard rates being paid by the Ridgefield community center are, on average, below the $11 per hour rate used for SCC lifeguards.  Mr. Hochvert also stated that any Village Board commitments to the project would only be given subject to certain conditions and he requested that the SCC provide an estimated timeline showing the time required for each step in the project.

Richard Toder asked about the nature of the commitment sought from the Village Board and indicated that the current Board couldn’t commit future Boards.  He also asked about the impact of the current rating agency problems on Scarsdale’s future debt ratings.  Mr. Bush responded citing the offsetting pressures on rating agencies to relax and tighten rating levels and indicated that Scarsdale’s strong favorable rating relative to other communities would survive changes that may result from current industry pressures. 

The meeting ended after nearly three hours with a few questions from the audience including comments from Fox Meadow residents who are concerned about the impact that the Center could have on their neighborhood.

REPORT OF OCTOBER 7TH MEETING