By Kim McDarison

The Whitewater Common Council and the Whitewater Unified School District Board of Education Thursday conducted a joint meeting to discuss Whitewater Aquatic and Fitness Center contractual negotiations.

Council President Jim Allen and Board of Education President Larry Kachel called the meeting to order, after which Allen read into the record a memo released last Monday, written by Whitewater City Manager John Weidl, outlining components within two proposals, one submitted by each negotiating entity — the district and the city — after members of the Whitewater Aquatic and Fitness Center Subcommittee discussed contractual negotiations last month.

Efforts to negotiate an aquatic center operating and lease agreement between the two parties began in March.

During the subcommittee’s monthly meetings, tensions have grown between the two groups as the city works to achieve a commitment from the district to support a portion of the center’s operating costs and the district works to shift its obligations away from operating expenditures, opting instead, to increase its support of the center through capital and maintenance financing.

While the negotiating parties have found agreement on peripheral issues, such as a contract length and a committee structure to provide aquatic center oversight, finding resources to continue to operate the facility in its current format has been an ongoing challenge.

Proposals submitted by each entity in May

Written proposals submitted by each group began surfacing in May at which time the city proposed a 15-year contract which would split operating costs between the two entities such that each would contribute 219,000 towards annual operational costs and an additional $70,000 toward capital improvements. Additionally, the city proposed sharing the cost of a more than $440,000 operating deficit, determining that each entity would become responsible for a payment of $222,000

The school district proposed a 1- to 3-year contract during which it would contribute $7,500 towards annual operational expenses and would become fully responsible for maintenance and capital improvement costs, up to 250,000, an amount it would make available through its “Fund 80,” which holds money dedicated to community-oriented expenditures. It further proposed to assume responsibility for one-third of the facility’s operating deficit in the amount of $150,000.

During the subcommittee’s May meeting, Whitewater Unified School District Board of Education and subcommittee member Jennifer Kienbaum said the board had met one night earlier and agreed to pay half of the facility’s existing operational deficit, in the amount of $220,000, but did not want any further financial obligation associated with the facility’s day-to-day operational expenditures.

Following subcommittee negotiations in May, the city council, meeting in closed session on May 16, reconvened in open session and unanimously instructed Weidl to “deliver a draft proposal for a four-year operating agreement, with … split operations and capital (cost obligations), and removing future deficit responsibility for the school district.”

New district proposal in June; district to operate lap pool

Returning to the negotiating table in June, subcommittee members representing the school district told the joint panel that they had developed a new proposal.

Plans called for the district to become responsible for the center’s lap pool, leaving operations of the center’s leisure pool and fitness center with the city. The agreement further proposed that the district would become responsible for maintenance and repair to the center’s roof over the lap pool and its utilities room, along with any maintenance to the center’s parking lot, while the city would become responsible for the roof over the center’s leisure pool and fitness center.

During negotiations, the district’s representatives expressed disappointment with the center’s management and marketing strategies, citing the city’s ongoing practices as hindering the center’s ability to bring in revenues to offset operating costs. With Park Board oversight, district representatives described a lack of participation made available to them regarding the center’s operations.

City officials asked district representatives to consider allowing them to sell concession items available at the center to students during lunch. Consternation arose over whether the center’s concession stand was defined as an on-campus or off-campus facility, with each definition bringing restrictions, according to the district’s subcommittee members and its superintendent, Caroline Pate-Hefty.  

During discussion, subcommittee members representing the city asked district representatives to increase their contribution to operational expenditures from $7,500 annually to $63,000, which, they said, represented the cost associated with the district’s use of the center.

Reaching for common ground, Kienbaum said: “I can probably get the board to come to an agreement if we could contribute more in capital than operations, because for our constituents, it’s our building and it’s an easier sell for us to be able to say it’s our building, it’s our equipment, as opposed to we’re running a leisure pool and a fitness center.” 

She expressed a concern that the board was unwilling to incur expenditures that would cause it to raise its tax levy in upcoming budgets.

Directing her concern to the district’s Business and Finance Director Ben Prather, Kienbaum asked if the city’s ask of $289,000 would cause the district to need to raise taxes. Prather responded, saying: “It’s a huge calculation.”

Prather said the city’s proposal was asking the district to raise its overall contribution to the facility from $178,000 to $289,000. The increase would likely necessitate an increase in taxes, he said.

Following the June meeting, Weidl released a memo, itemizing areas of differences and agreement between the two parties.

A summarizing memo in July

In his July 10 memo, Weidl  provided a “point-by-point” analysis, which was read into the record by Allen during Thursday’s joint city council and school board meeting.

The analysis identified items within the combined proposals about which both entities agreed, along with items within the district’s most recent proposal which the city would decline.

Among areas of agreement, Weidl cited a contractual period of six years. Both entities also agreed that annual contributions made to support the center should increase by 3% during each year of the contract to adjust for inflation.

Within his memo, Weidl noted that the district’s contribution towards operational expenditures in the first year of the agreement, 2024, would be $178,000, which, he wrote, is the same as the district’s 2023 contribution level.

Under the new proposal, the city’s contribution would be $250,000, which, he noted, is $70,000 more than the city’s obligation in 2023.

The agreement proposed that each entity would provide $100,000 for capital expenditures, with those funds to be managed by the district, and used for facility maintenance, including HVAC systems, parking lots, roof and building repairs, pool mechanical and heating equipment, and other capital equipment related to the facility. However, expenses such as fitness equipment replacement, leisure pool play structures, lockers, audio and security equipment, and other IT infrastructure would be covered by the facility’s “cost center, the city, or other sources of funding.” 

The agreement further stipulated that oversight of the facility would be removed from the city’s Park Board, and transferred to a new seven-member “shared leadership committee.” The committee would be composed of one member from each of the collaborating entities, and several members of the public.

The city agreed that it would be the recipient of all revenues received by selling services at the facility, and the city would become responsible for any operational overruns as part of the new contract.

The two entities agree that the district will become responsible for chemical maintenance of the lap pool, provided, Weidl wrote, that the district is also responsible for chemical maintenance of the leisure pool.

Among items the city would decline, Weidl noted a proposal made by the district which stipulated that each entity would become responsible for HVAC equipment within a designated area, including future costs of maintenance and repairs. The proposal stated that the district would be responsible for maintenance of the center’s older boilers, nos. 3 and 4.

Also declined was a provision made by the district requiring the city to pay for half of the facility’s utility costs in the first two years of the contract, which it estimated at approximately $202,934. Within its proposal, the district suggested the installation of separate meters. It asked the city to continue to split the cost of utilities until the new metering system was in place.

Further, the city declined suggested changes to the operating hours of the facility’s lap pool. Within the proposal, the district suggested that it would become responsible for governing the lap pool’s hours of operations. The city declined the provision, noting that, as a renter, it would maintain control over the pool’s operations, including its hours of operation.

Kachel announces a new district proposal

During Thursday’s meeting, and after Weidl’s memo was entered into the record, Kachel said the district had yet another proposal.

Within the new plan, Kachel proposed that the district increase its proposed payment for capital expenditures by $100,000, bringing its total annual obligation to $200,000, but it would then reduce its operational obligations by the same amount, bringing its annual operational payment down to $78,000. 

During discussion, members of the city council and staff explained to school board members that the proposed arrangement would not benefit the city in terms of operating expenses because money earmarked by the city in its capital improvement plan, including its $100,000 annual contribution for aquatic center capital expenditures, would likely come from a borrowing. State statutes prohibit the city from using funds obtained through borrowing to cover operational expenses.

Councilwoman Lisa Dawsey Smith noted that, would the district contribute $100,000 less to the aquatic center’s operating funds, the city would need to make up the difference by finding $100,000 in its general fund operating budget, which likely would be achieved by cutting other city services.

Kachel said the district’s proposal offered the city an opportunity to save $100,000.

“We cannot borrow the money and put it into operations legally,” Weidl said.

He added that the city could increase its capital contribution to $200,000, but it would still need $178,000 from the school district in order to keep the aquatic center open. Without those funds, he said, “we’d have to make cuts.”

Council unanimously approved a motion made by Dawsey Smith, requesting that city staff create a spread sheet showing an increase by $100,000 to the aquatic center’s capital budget, making the city’s contribution to capital expenditures $200,000. The motion further asked staff to create a forecasting model, showing the increase through 2029.

In addition, Kachel noted the district’s desire to form a new committee to oversee management of the aquatic center, further suggesting that the committee have five members instead of seven, with representation from the city council, school board, and members of the community with particular expertise that could aid in the smooth management of an aquatic and fitness facility. 

A memo from Weidl titled: ‘final’ offer

Following Thursday’s meeting, Weidl released a memo titled: “Final WAFC offer from the city of Whitewater,” which began with the following statement: “I write this introduction with a tone of utmost seriousness and firmness. The city of Whitewater and its community have reached a breaking point in our patience with the (Whitewater Unified School District’s) lack of clear direction and delayed actions concerning the Whitewater Aquatic and Fitness Center (WAFC). Time is of the essence, and we can no longer tolerate the indecisiveness and inaction that have plagued the future of this vital facility, including during last night’s joint meeting whereby only the city council affirmed its commitment to the WAFC by vote.

“Our last proposal, presented after extensive discussions and careful consideration, offers a practical and fair solution to the challenges faced by the WAFC. The city has gone above and beyond, significantly increasing its operational and capital contributions, and taking on the responsibility of covering any additional funds needed for operations. We have demonstrated our commitment by providing substantial financial support to ensure the maintenance and improvement of the facility.”

Weidl called upon the district to receive the city’s newest proposal with “wholehearted support.”

Within his memo, Weidl outlined a “framework” of the proposal, which, he said would break down the contributions made by each entity — the district and the city — into two categories: operational and capital.

Outlining annual contributions, the city’s newest proposal assigns a responsibility of $178,000 for operational expenses to the school district, with a first payment made in 2024. The contribution would increase for inflation by 3% annually over the life of a six-year contract. 

The proposal assigns a responsibility of $250,000 to the city with a first payment, made in 2024, subject to a 3% annual increase for inflation over the life of the contract.

Regarding capital contributions, the district will provide $100,000 and the city will provide $200,000 in the contract’s first year. The contributions will increase annually throughout the life of the contract by 3% for inflation.

The proposal further identifies a new oversight committee for the aquatic center. The five-member “shared leadership committee” will be composed of one member from the school board, one member from the city council, with the remaining three members appointed as at-large representatives from within the community.

“Although this committee will not have direct employment or budgetary authority, it will participate in the annual development, recommendation, and adoption of business and marketing plans for WAFC operations,” Weidl wrote, adding that the committee will serve as a recommending body to the school board and the council.

Review of all committee candidates will be undertaken by the city manager and council president, with final appointment made by the city council.

In addition, the proposal addresses the center’s outstanding and accrued operational deficit in 2023, noting that any such debt accrued before July will be split equally between the two entities, with a payment made by the district to the city no later than Dec. 31.

The Whitewater Common Council will next discuss the aquatic center operating and lease agreement Tuesday during its regular council meeting. The agenda lists the aquatic center under staff reports in open session and again in closed session, further noting that the council will not reconvene in open session.

The school district will next meet on Aug. 14.

The next joint meeting of the two bodies to discuss the aquatic center agreement is scheduled for Aug. 21. The meeting will be held at the Whitewater Municipal Building at 6 p.m.

The full timeline: Five months of negotiation

The Whitewater Aquatic and Fitness Center Joint Subcommittee has been undergoing a negotiating process for five months. A overview of the process, to date, follows.

March 2: Subcommittee holds initial meeting to negotiate a contract; last contract expired in 2021

The Whitewater Aquatic and Fitness Center Subcommittee held its first meeting in March.

The meeting, which was initially scheduled for two hours, was adjourned after one, with subcommittee members offering little discussion about the formation of a new contract between the two entities — the school district and the city — for a lease and operational agreement of the Whitewater Aquatic and Fitness Center.

The facility, which opened in 2001, had been operating with a contractual agreement between the two entities since its inception. A most recent contract between the two parties had expired in 2021.

The last agreement between the two parties was signed in 2016. City officials noted that when a renewal document was drafted by council and sent to the school district in 2021, it was never signed.

Two years had since lapsed and the facility, which had been operating without a signed agreement, was showing an operational deficit of $413,000. Pervious contracts made each entity responsible for half of the facility’s financial obligations. 

During the march meeting, nine members of the public addressed the subcommittee, with a majority speaking in support of the pool and the necessary community-based funding to maintain public access and its continued operation.

A story about the subcommittee’s first meeting is here: https://fortatkinsononline.com/whitewater-aquatic-center-subcommittee-discusses-operations-finances/.

April 11: Subcommittee considers $5 million in improvements

In April, the school district shared with subcommittee members a report compiled by J.P. Cullen in February at the district’s request, enumerating some $5 million worth of facility and equipment improvements which, according to school district subcommittee representatives, could be completed within the next five years. 

In addition, representatives from the school district expressed a desire to bring costs — including those associated with any existing shortfall, annual operational expenditures, and any agreed upon capital improvements — before its electorate through use of a non-binding referendum question, citing a need to raise taxes to meet any expenses for which it might become responsible, regarding a contractual agreement with the city.

Subcommittee members discussed the potential opportunities for ballot placement of a referendum question, with Weidl noting that the soonest opportunity would be presented in April 2024. 

City council subcommittee representatives expressed a desire to see a lease and operational agreement between the two entities signed sooner, perhaps, subcommittee member Jim Allen said, as early as this fall. 

No formal action was taken during the meeting. Instead subcommittee members discussed the capital improvements document as developed by J.P. Cullen and presented by the school district, and identified information needed to continue the process during their next meeting scheduled for May 11. 

During the April meeting, subcommittee members looked at the financial contribution made by each entity — the city and the district — beginning in 2001, when the faculty opened, and 2016, at which time each entity paid a fixed amount of $75,000 towards the facility’s full set of expenses.

In 2016, and with the start of a new contract, each entity was asked to increase its annual payments to $128,000, with $78,000 to be spent on operational expenses and $50,000 earmarked for capital expenditures.

In April, then-Whitewater Finance Director Steve Hatton said a “mismatched” timing in payments, which each entity was responsible to share, beginning in 2021, began to differentiate and show a shortfall, creating an operating deficit. 

The mismatch, both groups agreed, was created by a difference in each entity’s fiscal year. 

While the city operates fiscally on a calendar year, the school district’s fiscal year runs from July through June. 

According to Hatton, and as shared with the group in March, contributions “weren’t equally paced any longer” and “at the close of 2021, … the acquired deficit since 2016 is $413,000. Once you add the 2022 deficit, we are talking $425,000 on a combined basis,” he said. 

Would the two entities continue to follow a shared approach, each entity would be responsible for half of the identified deficit. 

A story about the subcommittee’s April meeting is here: https://fortatkinsononline.com/aquatic-center-subcommittee-considers-5-million-in-improvements-non-binding-referendum/.

The full J.P. Cullen report, compiled at the district’s request and shared with subcommittee members in April is here: https://www.whitewater-wi.gov/AgendaCenter/ViewFile/Item/7281?fileID=28796.

May 11: Subcommittee considers merits of two proposals

During the subcommittee’s May meeting, the city proposed a 15-year operational and leasing contract which split operating and capital costs between the two parities such that each party would contribute $219,000 towards annual facility-related expenses. The number would increase by 3% annually to adjust for inflation. In addition, each entity would earmark $70,000 for placement in a capital expenditures fund. The proposed contract further carried a split obligation to pay for the facility’s existing accumulated debt, with each entity becoming responsible for a payment of $222,000. 

Also in May, the school district proposed a 1- to 3-year length of contract, with the organization assuming no responsibility — beyond the payment of a $7,500 fee for pool use by the school’s athletic department and summer programming — for operational expenses, but taking full responsibility for maintenance and capital improvements made to the facility up to $250,000, an amount which the district proposed to make available through its “Fund 80,” which is dedicated to community-oriented expenditures. The district, within its written proposal, further offered to assume responsibility for one-third of the facility’s existing debt, in an amount of $150,000.

During the subcommittee meeting, Whitewater Unified School District Board of Education and subcommittee member Jennifer Kienbaum said the board had met the night before the subcommittee’s meeting and would agree to pay half of the facility’s existing operational deficit, in the amount of $220,000, but did not want any further financial obligation associated with the facility’s day-to-day operational expenditures.

In addition, subcommittee members discussed a number above $7,500 annually that the school district might entertain for operational expenditures.

Councilwoman Jill Gerber noted that the city viewed $63,000 — which had been identified by city staff as the cost associated with the district’s use of the facility — as a bottom-line contribution the district could make and still allow the facility to remain open to the public in its traditional configuration.

Weidl said he would next work to prepare a draft budget to present to the city council during an upcoming council meeting which included a closed session to discuss aquatic center contractual negotiations.

Looking beyond the aforementioned council meeting, Weidl said: “We will share with you what the structure looks like with that number ($63,000) plugged in.

After a period of discussion, the parties agreed to consider making changes to each proposal and return for renewed discussion during the subcommittee’s next meeting, which was scheduled for Wednesday, June 14.

An earlier story, including the introduction of the two proposals to the public, is here: https://fortatkinsononline.com/officials-share-proposals-in-advance-of-upcoming-aquatic-center-subcommittee-meeting/.

An earlier story about the subcommittee’s May meeting is here: https://fortatkinsononline.com/aquatic-center-subcommittee-debates-merits-of-contractual-proposals-city-to-extend-new-draft/.

City council’s May 16 meeting

Following the subcommittee’s May 11 meeting, on May 16, the city council met in closed session, then reconvened in open session and unanimously instructed Weidl to “deliver a draft proposal for a four-year operating agreement, with … split operations and capital (cost obligations), and removing future deficit responsibility for the school district.”

An earlier story, outlining the subcommittee meeting, which led to the development of a new draft, is here: https://fortatkinsononline.com/aquatic-center-subcommittee-debates-merits-of-contractual-proposals-city-to-extend-new-draft/.

June 14: District proposes operating lap pool 

Following the subcommittee’s June 14 meeting, subcommittee members from each of the negotiating parties — the city council and the school district — agreed to return to their respective boards with changes made to an earlier proposal discussed by the subcommittee members in May.

Among proposed changes made in June to the city’s May proposal, the district’s subcommittee members told the body that the district wanted to assume operational responsibilities for the center’s lap pool, leaving operations of the center’s leisure pool and fitness center with the city. The agreement further proposed that the district would become responsible for maintenance and repair to the center’s roof over the lap pool and its utilities room, along with any maintenance to the center’s parking lot, while the city would become responsible for the roof over the center’s leisure pool and fitness center.

During discussion, frustrations flared on both sides of the negotiating table, prompting subcommittee member and council president Jim Allen to reconfigure the meeting’s tables from that of a dais-style format to one similar to that found in a conference room. He also asked all supporting staff members from both organizations, including Weidl and Pate-hefty, to leave the discussion. 

Among frustrations expressed, subcommittee members representing the school board noted concerns with the city’s Park and Recreation Board’s oversight of the facility, citing a need for increased accountability.

Reaching for common ground, subcommittee and board of education member Kienbaum said: “I can probably get the board to come to an agreement if we could contribute more in capital than operations, because for our constituents, it’s our building and it’s an easier sell for us to be able to say it’s our building, it’s our equipment, as opposed to we’re running a leisure pool and a fitness center.” 

She expressed a concern that the board was unwilling to incur expenditures that would cause it to raise its tax levy in upcoming budgets.

Directing her concern to the district’s Business and Finance Director Ben Prather, Kienbaum asked if the city’s ask of $289,000 would cause the district to need to raise taxes. Prather responded, saying: “It’s a huge calculation.”

Prather said the city’s proposal was asking the district to raise its overall contribution to the facility from $178,000 to $289,000. The increase would likely necessitate an increase in taxes, he said.

An earlier story about the subcommittee’s June meeting is here: https://fortatkinsononline.com/tensions-escalate-during-aquatic-center-subcommittee-meeting-district-proposes-operating-lap-pool/.