City Council voted 6-1 during the April 6 meeting to approve a renegotiated lease with the San Marcos Lions Club for its tube rental business at City Park.
Place 1 Council Member Max Baker cast the dissenting vote on an action that followed a terse debate over lease negotiations that have served as a wedge issue for Lions Club members as well as its supporters and regional nonprofits and were also a point of frustration for members of City Council and the San Marcos parks board.
"To say that the process has been difficult is an understatement," Lions Club President Dennis Gutierrez said during his public comments at the beginning of the meeting. "I'm not sure how the Lions Club became such a target, but the comments made about a service organization were difficult to swallow, and we feel were unwarranted."
At issue is whether the arrangement remains a fair deal for the city, and, among other benefits, proponents of changes to the lease renewal said it could help provide the parks department with much needed funding.
"The parks department operates at 14% cost recovery," parks board member Diane Phalen said. "They really are so underfunded and understaffed, and the parks board has been really working hard to try to find various avenues to get more money."
While the monthly rent will remain unchanged, other amendments to the new lease include shifts in how the Lions Club allocates certain donations as well as when the organization conducts cleanup work around the area where it operates.
Breaking down the debate
Earlier this year, the parks board recommended several measures be added to the lease to improve the health of the river and raise additional funds for the city, such as limiting days of operation and adding a $2 surcharge per tube rental and shuttle ride.
The Lions Club is an international service organization that is tax-exempt in the United States. The San Marcos chapter donates profits from its tubing business to local nonprofits such as the Hays Caldwell Women's Center, Greater San Marcos Youth Council and CASA of Central Texas.
The original lease for the facility, approved in 2011 after a fire destroyed the previous building in 2009, comes up for renewal every five years and has the potential to run through 2036. A mutual agreement of the lease's terms is a component of the renewal that opens the door for renegotiation.
Those opposed to changing the terms of the lease say the move could result in a negative trickle-down effect on the community.
"Should the funding from the Lions Club decrease because of the amendments to their lease agreement, it will not only put a strain on our nonprofits that receive the funds, but also on people receiving services from those nonprofits," said Michelle Harper, president of the United Way of Hays and Caldwell counties, during the meeting. "Some of you may think, 'Well, they'll just get other donations.' I wish it were that easy."
For the 2018 tax year, the Lions Club's 990 tax exemption form shows a total revenue of $1,067,466. Salaries and wages accounted for $292,472, and another $456,108 went toward expenses that included merchandise and tube operations. According to the document, Lions Club leadership are unpaid volunteers.
A total of $348,070 was doled out in grants. Six organizations were listed as receiving more than $5,000 in 2018, with San Marcos Lions Charities getting the largest amount at $70,000. Hays Caldwell Women's Center was the second most funded with $25,000.
"Over the past three years, we have averaged returning about $375,000 to the community," Gutierrez said. "The city is a beneficiary of a portion of these funds each year."
Baker and others argued additional revenue is still needed to fund the city's parks rangers, and a lack of staff poses a danger to public safety.
"The impetus for looking for more funds in this rental rate agreement was kind of focused on how can we guarantee more money," Baker said. "Not through donations, but through reliable rental fees to pay for park rangers."
How the leases compare
The lease's 2011 terms included $10,800 in annual rent with marginal increases during each renewal. The $11,900 in yearly rent for the 2021-26 term remained unchanged after negotiations.
Concession stand revenue was not included in previous iterations of the lease, but the Lions Club reportedly donated 75% of proceeds to the park rangers division. Conflicting figures in city documents state a minimum of $14,000 was donated every year since 2016, with an annual high ranging from $23,850-$29,000.
Instead, the city will now require a donation of $285 for every day the Lions Club operates a new Rio Vista Park concession stand, which is expected to provide a more steady contribution of $19,950-$21,660 per year.
The Lions Club was required to assist in the city's designated river cleanup events in the previous lease but will now be required to send employees out during each day of operation to clean City Park and Dog Beach as well as the Rio Vista Park area between the new concession stand and Reynolds Drive along Cheatham Street.
A minimum of $10,000 per year will also be paid to the new river parks improvement fund established by the city. It will be funded through donations collected by the Lions Club, which will be responsible for closing any funding gap.
Future lease renewals will also have a deadline of Oct. 1 of the year preceding the expiration of the lease.