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June 07, 2012

Virginia Supreme Court hears testimony in YMCA case

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DailyProgressBy Sean Tubbs
Charlottesville Tomorrow
Thursday, June 7

RICHMOND — The Virginia Supreme Court spent an hour Thursday debating whether Albemarle County and Charlottesville broke the state’s public procurement laws when they entered into an agreement with the Piedmont Family YMCA.
 
YMCA-Slide1
Artist's rendering of the planned YMCA (Source: VMDO Architects/Piedmont Family YMCA)
“The Public Procurement Act … exists to ensure that all bidders have access to public business and that favoritism does not result,” argued David Thomas, attorney for the Charlottesville Area Fitness Club Operators Association.
 
The group, which consists of ACAC and Gold’s Gym, filed suit in May 2010 against the city and county, claiming that each violated procurement rules to give an unfair advantage to the YMCA.
 
Charlottesville’s City Council awarded a $1-a-year ground lease to the YMCA in December 2007 after issuing a request for proposals to build and operate an aquatic center on the western side of McIntire Park.
 
The RFP called for a “nonprofit youth and family community recreation center program to construct a facility to operate their program.”
 
The YMCA was the only bidder and proposed to construct a 77,000-square-foot fitness and aquatic center on land currently occupied by picnic shelters.
 
“This lease was improperly bid out and my clients’ rights were infringed,” Thomas said. “Any one of my clients could have provided the services at a cheaper price.”
 

Related stories by Charlottesville Tomorrow

City to advertise lease agreement for McIntire Park YMCA, September 18, 2007, by Sean Tubbs

Council approves McIntire Park lease for YMCA, December 18, 2007, by Sean Tubbs

County approves use agreement for McIntire YMCA; pool details to be ironed out, January 10, 2008, by Sean Tubbs

Fitness group sues Albemarle and Charlottesville over YMCA, May 13, 2010, by Sean Tubbs

YMCA officials hopeful for summer construction, pending lawsuit, February 19, 2011, by Sean Tubbs

Testimony heard in case against lease for YMCA fitness center, April 2, 2011, by Sean Tubbs

Judge dismisses second YMCA lawsuit; Fitness clubs considering appeal, April 21, 2011, by Sean Tubbs

VA Supreme Court to hear YMCA case of fitness clubs vs. Albemarle, August 22, 2011, by Brian Wheeler

 

However, deputy city attorney Allyson Manson-Davies argued said the City Council had the authority to do so.
 
“Council has broad discretion as a practical purpose and chose to lease out land,” Manson-Davies said.
 
As part of the deal, the city agreed to allocate $1.25 million toward the center’s construction in exchange for priority time for Charlottesville High School’s swim team.
Albemarle County agreed to allocate $2.03 million as a donation to build the center.
 
Thomas said both contributions should be governed by the Public Procurement Act because a 26-page use agreement signed by the city, the county and the YMCA is a contract.
 
In Circuit Court, Judge Cheryl Higgins ruled in favor of the county in November 2010 and in favor of the city in April 2011.
 
Higgins had supported the city and county’s argument that another section of state code that governs municipal donations allows for an exemption from procurement rules. That means the locality can choose groups it want to contribute money to.
 
However, Justice William C. Mims said the Virginia Supreme Court’s interest in the case is to explore unanswered questions.
 
“The issue becomes, do you have to comply with the Public Procurement Act?” Mims said. “This is a donation by appropriation, but it is quacking like a contract.”
 
However, Manson-Davies said the use agreement is an extension of the lease.
 
“It is not true that we are procuring fitness services,” Manson-Davies said. “We are not authorized to do so. The city is making a charitable donation in order to get an extra amenity to benefit its citizens.”
 
Mims pressed Manson-Davies for a deeper explanation.
 
“Every single time in Virginia a locality contracts by lease, [you’re saying] the Public Procurement Act does not apply?” Mims asked.
 
“Yes, because what you have here is real property being leased,” Manson-Davies said. “That is their right.”
 
Mims said that interpretation was “stunning in its breadth.”
 
“If [a locality] tells a contractor that they have already been chosen and then leases the land to them so they don’t have to comply with the Public Procurement Act, that’s a slippery slope you are putting us on,” Mims said.
 
During his testimony, Deputy Albemarle County Attorney Greg Kamptner argued that the use agreement was the only way for Albemarle to have some control over how its donation would be used.
 
“Because the YMCA would be located within the city, the use agreement ensures county residents will have access,” Kamptner said. “The services called for are speculative. The use agreement can be fulfilled even if no county resident ever enters the facility.”
 
Kamptner was asked several times whether he believes the agreement is a contract.
 
“It’s not a contract for services within the scope of the Public Procurement Act,” Kamptner said. “Section 15.2-953 allows localities to make donations to provide benefits.”
 
Chief Justice Cynthia D. Kinser said her interpretation was that donations could be made to organizations that are already providing services, but not necessarily for those that have yet to do so, such as the YMCA. If that was the case, how could Albemarle use this provision to make a donation for a capital project?
 
Kamptner was not able to answer, but maintained that the purpose of the charitable gift was governed in the use agreement and that county residents would benefit.
 
“That’s a laudable goal but if it’s a contract, it must go through the Public Procurement Act,” Mims responded.
 
That is the question the Virginia Supreme Court will be deciding. A ruling is expected to be published before the start of the next session in September.
 

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