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Nervous about some of the company's projections, the City Council turns down signing a contract with the company.

GAZETTE PHOTO: RAY PITZ - A packed meeting greeted the Sherwood City Council for the second week in a row. Many of those who attended appeared to support signing a contact with the YMCA of Columbia-Willamette, provider of city recreation facility services for almost 20 years.

(This story updates a previous one, adding comments from council members regarding next steps in the recreation center process and talk of moving forward with a recall effort.)

The Sherwood City Council has rejected moving forward with a contract with a Minneapolis-company that would have provided services for the city-owned recreation center.

During a special meeting called Tuesday evening, the council voted 4-2 with "nay" votes dominating the question of whether the city should sign a contract with HealthFitness. The vote effectively ended what had at times been a divisive process for many supporters of the YMCA, which has provided services at the recreation center for almost 20 years.

The vote came after city staff on Tuesday recommended saying no to HealthFitness based on several financial factors including questions related to the organization's financial projections and a fear the city might incur loses the first year that HealthFitness wouldn't cover.

"This morning, staff changed gears from negotiating the contract to evaluating the contract," City Manager Joe Gall explained to a room packed with more than 100 people, the majority of whom appeared supportive of keeping the YMCA.

Gall said staff recommendation was to not sign a contract with HealthFitness.

Tuesday's vote ended with "nays" from Mayor Krisanna Clark-Endicott, Councilor Sean Garland, Councilor Jennifer Kuiper and Councilor Kim Young. Both Councilor Sally Robinson and Councilor Jennifer Harris voted "yea" for the resolution (although Harris later said she had meant to vote no, noting she usually supports staff recommendations).

The process of finding a suitable recreational provider has been ongoing for months.

In the end, HealthFitness and the YMCA ranked as the top two contenders. Mayor Clark-Endicott along with Councilors Robinson and Harris gave HealthFitness top rankings while Councilors Young, Garland and Kuiper favored the YMCA.

In August, the council agreed to pursue a contract with HealthFitness to provide future services at the rec center and city staff has been negotiating with the company since then.

Initially, HealthFitness sent documents saying they expected to lose money over the course of five years, originally projecting a $1.5 million loss, an amount later changed to a $480,700 compared to YMCA officials who had predicted a surplus of $119,310 over that same time period.

However, on Sept. 19, HealthFitness officials appeared before the council and said recalculations showed they hadn't taken into account how the YMCA figured their monthly membership fee profits, projecting that their company would likely show a profit of almost $600,000 over those same five years.

Those figures played into the discussion by city staff in suggesting the council reject a contract with HealthFitness.

"While this evaluation of the proposed contract is multi-dimensional, it does essentially come down to a singular important question — is this contract with HealthFitness in the best interest of the City of Sherwood?" Gall wrote in a staff report. "As the City Manager for the City of Sherwood, my response to this question is that the proposed contract is not in the best interest of the City of Sherwood."

Among the concerns were the company's projection of membership growth.

"I have serious concerns about their abilities to achieve the projected 5 percent annual growth rate in membership over the initial five-year period," Gall wrote in his report.

On Tuesday afternoon, Gall said in a phone call that he worried too about the likely attrition from current YMCA members who are so strong in their support of the current recreational providers that they would probably drop their memberships, hurting the city's bottom line.

In addition, he said any losses that occur in the first year of services provided by HealthFitness would have to be covered by the city.

Also during Tuesday's council meeting, there was a discussion on where to go from here with some councilors asking if the city shouldn't just start over with a new request for proposal, a suggestion that didn't move forward. Harris said the city should think about selling the current building while Garland suggested the council talk next to the YMCA and Young saying the council could extend the YMCA contract for a year.

There was also talk of moving forward with an agreement the council made at the Aug. 15 council meeting that if a contract with HealthFitness fell through, the city would pursue the next highest-ranking rec provider, which in this case is the YMCA of Columbia-Willamette.

Discussion of who will receive the recreation services contract has been contentious one, being one of the leading reasons of a recall effort on Clark-Endicott, Robinson and Harris, citing their initial support of HealthFitness despite what were initial losses listed by the company.

Meanwhile, Kuiper told councilors and audience members Tuesday that debating the contract for finding a recreation provider as well as the subsequent fallout, has been stressful. However, she said she does not agree with a recall based simply on political disagreements.

At the same time, Robinson said she has received numerous angry emails regarding the vote on the recreation center issue and took issue with efforts of those leading an effort to recall herself, Clark-Endicott and Harris.

"I think it's completely irresponsible and embarrassing for our whole city," she said, adding she believes Clark-Endicott has worked harder than any mayor in Sherwood's history.

Robinson has said she believes the recall is politically motivated, led by James Copfer, a former Sherwood Planning Commission member; Linda Henderson, a former City Council member; Gail Cutsforth, a mayoral candidate who ran against Clark-Endicott last November; and Chris Elkins.

"This is the process of government and it's uncomfortable sometimes," Clark-Endicott said. "If I didn't care, I wouldn't do this job."

James Copfer, chief petitioner of the recall effort, has said he will continue recall efforts regardless of results of who becomes the city's next recreation provider.

The council will meet again on Oct. 3.

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