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After the company behind the Burgess and Belle Haven aquatics centers violated its agreement with Menlo Park, the Menlo Park City Council is in a difficult position: risk further cuts to hours and potentially finding a new operator or subsidize the operator.
The city has contracted Team Sheeper to run the Burgess pool for over 20 years and it began operating the Belle Haven pool when it opened on May 20, 2024. However, Team Sheeper claims it is risking financial insolvency without city intervention. A majority of city councilmembers have rejected Team Sheeper’s past proposed subsidies.
On May 21, the City of Menlo Park sent a notice of default to Team Sheeper after it cut hours at the Burgess Aquatics Center without proper notice and kept hours at the Belle Haven pool lower than contractually required. The decision to cut hours at Burgess came after the City Council denied Team Sheeper’s two previous requests to amend the contract with increased fees and a lower revenue share agreement. Sheeper was allowed to raise non-resident fees.
It was the latest move in a challenging relationship between the operator of the Burgess and Belle Haven pools and the city.
“Is this going to become a practice for [Team Sheeper] when they do not get what they asked for?” Councilmember Cecilia Taylor said during the City Council’s June 10 meeting. Taylor, an ardent critic of Team Sheeper, requested the City Council discuss how it should address the current situation at the pools at that meeting.
Team Sheeper claims it is facing significant financial losses caused by low usage at the Belle Haven pool. Since opening in spring 2024, the Belle Haven pool has recorded 92,000 visits, which is 18% of visits to Burgess pool in the same time period. Both figures exclude subcontractors that run other pool programs.
Low usage is especially impactful on profitability since expenses do not scale with usage. Whether there are zero users or 100, Team Sheeper is required to maintain a minimum of two lifeguards and a manager.
According to Team Sheeper’s report to the City Council, direct employment compensation (which excludes employer paid taxes) from Belle Haven pool operations cost $290,000 in 2024 — $32 per hour open.
“It’s simple math. We’ve got staff that we are paying but very little revenue coming in,” Team Sheeper CFO Carole Hayworth said in an interview.
Taylor blames Team Sheeper for low usage at Belle Haven.
“I believe a part of the reason that the Belle Haven pool was not profiting as much as the Burgess pool is because of the way it was programmed and the level of outreach,” Taylor said.
Taylor, who represents the Belle Haven area, objects to the narrative that the Burgess pool is subsidizing the Belle Haven pool. Other councilmembers agree with that narrative, although not the negative connotation.
“That is the lens that the provider sees the community, that is the reason why he’s unable to serve the community as they are… People want to use the pool, it’s just who has control over it is not someone who serves the neighborhood. ” Taylor said. She contends many are not using the facility as they do not feel welcomed.
Taylor wants the council to consider other operators or the city taking control of the pools. When the city sent a Request for Proposals to run both pools, which Team Sheeper won, it received two other responses.
Mayor Drew Combs, however, sees issues with the city or another private operator taking control.
“I don’t know how there’s a transition that doesn’t result in the pools being closed for some time,” Combs said. “Let’s be clear, the city doesn’t even have a process for hiring lifeguards. We’d have to go talk to the unions. It would probably be more than a year long process for the city to take control of the pools.”
“We’ve got our surplus, do we want that $3 million going to go to the pools?” Combs said. “There are no other operators standing around.”
“I disagree with that. I think that’s the picture that’s been painted for the council, so that we chose (Team Sheeper) which is why I didn’t vote for the contract in the beginning,” Taylor said in response.
After the request for proposals in 2023, Menlo Park had two other options: SOLO Aquatics and the Swimming Swan. City staff told the council that it had doubts whether SOLO Aquatics, which has programs at the Belle Haven pool but not experience running a facility, could feasibly manage the pool. Swimming Swan is a pool management company that operates pools across California and in several states. Although city staff recommended Team Sheeper, they said Swimming Swan was a capable operator as well.
While Team Sheeper claims the contract it eventually signed was overly restrictive and the city’s expectations led to its financial troubles, nothing about the economic environment has changed since the contract was signed. Even though Team Sheeper operated a seasonal pool at the site of the Belle Haven Community Campus previously, it overestimated usage of the pool.
Hayworth said the reason it agreed to the contract was because Team Sheeper thought the city would help it if it got into rough waters.
“Our interpretation was that we were in a partnership with the City of Menlo Park, and that we work as partners, and that if there were significant financial issues, they would help to resolve them. That just seemed reasonable to me,” Hayworth said.
“The City of Menlo Park continues to work with Menlo Swim and Sport (a division of Team Sheeper) in good faith to provide the Menlo Park community a wide range of aquatic programming at both of its pools. The City is committed to honoring all the terms of its public-private partnership and formal agreement with Menlo Swim and Sport for the benefit of Menlo Park residents, as is the case with every agreement the City enters into. In that spirit, the City routinely provides advertising, promotional support, and community engagement to support its swim centers and help them be successful,” Menlo Park Communications Director Kendra Calvert said in a statement.
Hayworth said Team Sheeper had no choice but to lower hours at Burgess earlier this year without much notice as the offseason, when schools are still in session, was about to end.
Months ago, Team Sheeper raised the alarm about its financial state to city staff.
“City staff indicated they would be able to get some financial help for us. We’ve been talking about it since last September, and we were told to wait, then get our annual financials in, then get them reviewed, then wait longer. Now, we are in this position where we’re really in the hole because it’s been so long,” Hayworth said.
Before the June 10 meeting, Hayworth sent the City Council her proposal for financial remedies. During the offseason, Team Sheeper could only fund 23 hours a week at the Belle Haven pool, fewer than the 63 hours the city wants. Hayworth said the city could fund the extra 40 hours by providing a $235,000 subsidy.
Hayworth also proposed opening the Belle Haven pool 54 hours a week in the offseason with the city providing a $182,000 subsidy.
In addition to the other two, Hayworth proposed the city subsidize free lap swimming year round at the Belle Haven pool for Belle Haven residents, which would cost $70,000.
Hayworth said all of the subsidies would go only to direct costs and not managerial expenses.
If the City Council does not find a solution by fall, Hayworth warned Team Sheeper would reduce hours at the Burgess pool to 63 hours a week in the offseason, the contract minimum, but less than the 93 hours a week the community has come to expect.
In the meantime, the city has helped Team Sheeper with marketing more than ever before. Team Sheeper has begun outreach efforts and plans to continue working with neighborhood groups. Although not contractually obligated, the city will fund a mailer to residents advertising the Belle Haven and Burgess pools and offering a one-time use coupon. Menlo Park will not pay for the costs associated with the coupon.
City councilmembers directed Team Sheeper to provide a comprehensive proposal of what it needs to survive in order to prevent a situation where it keeps asking for additional funds.
Hayworth isn’t confident that the Belle Haven pool will ever have enough users to financially support operations.
“It’s located in a neighborhood that is very small. It’s not easily accessible. It’s going to take a while, maybe three to five years to get traction from that neighborhood. It’s always going to be a neighborhood facility, and that neighborhood should be able to use the pool when they want to use it. We just can’t afford it right now,” Hayworth said.
