City council keeps Lions Club tubing talks afloat

A split vote at Tuesday’s work session showed that the San Marcos City Council wants more money from Lions Club Tube Rental Facility lease agreement, but does not want to seek a commercial value rental rate. 

After a presentation and lengthy discussion, all but Councilmember Shane Scott said they want to receive more dollars for city parks and park rangers from the lease agreement, and in a four to three vote, councilmembers Mark Gleason, Saul Gonzalez, Scott, and Mayor Jane Hughson said they do not want to achieve that by way of seeking commercial value rental rate. 

With the second renewal for a five year lease up for expiration on April 10, the Parks and Recreation Board submitted a recommendation resolution regarding its recommended amendments to negotiate the lease, in hopes of bringing in more funds to the parks department after recent budget shortfalls.

“We understand that there’s a need to increase the amount of revenue coming in to properly maintain our parks,” Parks Director Drew Wells said. “[The Parks Advisory Board] has been looking at a lot of different avenues to try to increase monies coming into the city coffers.”

The San Marcos Lions Club offered two amendments in agreement with the recommendation and the councilmembers voted in favor of pursuing those options: The Lions Club agreed to add two additional hours of river cleanup efforts on the weekends. The Lions Club suggested creating a River Park Improvement donation fund on its website and at point of sale to direct funds to the city in response to another amendment suggesting a market value rental rate be pursued as well as a $2 surcharge per tube. 

The Lions Club was opposed to a rent increase saying that it would cause a reduction in its nearly $300,000 annual donations to charities.

“They said that by charging them a fair market value rate for that then we are taking away $300,000 from those organizations, when in reality the agreement can be structured in a way that allows the city to more fairly and more equitably allocate those dollars to organizations,” said Councilmember Maxfield Baker.

In response to the amendment asking the tubing business to limit their days of operation to provide the river with recharge days, the Lions Club was opposed, saying it would cause its customers confusion, but it offered to restrict May and September activities to weekends only.

The rental increase in the resolution was suggested in light of city budget shortfalls, including recent parks fee increases and new paid parking. Current annual rent is $11,350 and is set to repay the city for renovations after a fire in 2009 over several decades.

The Lions Club already donates around $20,000 annually to the parks department through a portion of its concessions.

“Does anyone not agree that they can donate more than $19,000, when all their profits come from the river at city owned property?” asked Councilmember Melissa Derrick after she detailed the amount of time park rangers spend attending to situations on the river parks. “We need these rangers. This isn’t a money grab for the city.”

The Lions Club brings in around $1 million dollars in revenue in non-pandemic years, and around $500,000 of that goes to operating expenses and salaries. 

Derrick suggested setting up other environmentally friendly concessions operations where the city could take in a portion of the proceeds, supporting small businesses in tandem; currently the Lions Club has exclusive concessions rights. 

“I don’t know what’s going to make more sense because if we increase the rent, I don’t want them to say we’re not going to get $19,000 anymore,” Derrick said. “So I would just like to be able to negotiate a realistic situation here with them.”

A majority of the councilmembers voted to pursue this option, however, Gleason said, “I don’t see how we are going to get better than 75%,” referring to the stated portion the city gets from Lions Club concessions.

The vote was split whether to seek market value rent, largely due to uncertainty that market value could even be determined for such a unique space; a portion of a warehouse on riverfront property.

Councilmembers nonetheless agreed to continue discussions about how to take in more revenue from the agreement without raising rent but many questions were left unanswered.

“The parks board never intended to throw out the Lions Club,” said Councilmember Saul Gonzalez, addressing residents' concerns that the lease would not be renewed in April. 

Staff said they will work to gather more information on revenue and costs between the city and the Lions Club as discussions continue. Staff was overall supportive of the terms that were negotiated and approved in the 2011 lease agreement.