A new deal

When Caitlin Reilly became executive director of the Chico Creek Nature Center in 2013, her organization was like an orphan out of Oliver Twist.

For years, its main sustenance had been Community Development Block Grant funding. When the city, which administered the federal money, changed the degree to which it supported community groups, going from $200,000 to $25,000 the next year, CCNC experienced serious hunger pangs.

“The city had tried its best to warn the organization that this was not going to be a long-term source of funding,” she said, “but it had fallen on deaf ears because there was so much transition, so much going on within the organization ….

“What I was facing was too much dependency on one source of funding; that was not a long-term solution to our problem.”

The center not only had ongoing expenses but also payments on a $185,000 city loan, made in 2008 to help with construction of an exhibit hall and classroom. Repayment had been sporadic.

Hands outstretched, pleading for some more, CCNC asked the city for additional funding and loan concessions while holding a series of “emergency fundraisers.”

“The community responded in a really fantastic way,” Reilly said. But she knew that wasn’t a sustainable way to make ends meet. “You can’t continuously say, ‘Help save us!’”

The city did not increase funding, nor did it remove the burden of the loan.

But now that the Chico City Council and Chico Area Recreation and Park District have signed off on separate but interrelated agreements, the nature center finally can see some relief.

At its Dec. 15 meeting, the City Council unanimously approved a revised lease and loan-repayment pact with CCNC, which stemmed from six months of negotiations that also included CARD working out terms to manage the center’s operation. CARD’s board of directors unanimously approved that agreement at a Dec. 17 meeting.

“It’s really a wonderful end to a difficult chapter and a beginning of a whole new set of opportunities for the center and for the community,” Reilly said. “We are ready to move into this whole new chapter.”

CCNC’s board must ratify the set of arrangements, but Reilly says this is a formality because board members participated in the negotiations and voted in advance to authorize Bill Beckett, their acting president, to sign the contracts barring any unexpected clauses.

CARD General Manager Ann Willmann is proceeding as if the deal is done, noting that the CCNC board has been “involved through the whole process” and “supportive of … what the other two governing bodies have agreed to.”

The city restructured its CCNC loan and modified its lease to fit requirements recently adopted by the City Council for municipal properties rented below market rate. Those requirements include assessments of the lessee’s financial performance and viability. Thus, the CARD agreement represented a crucial piece of the city lease.

CARD agreed to assume operational control of the nature center effective Jan. 4. All staff, including Reilly, will become CARD employees. The CCNC board will remain intact but take on an advisory role, along with fundraising. CARD will handle maintenance and cash flow, with the center expected to cover its expenses through programming revenue.

“With the day-to-day operations being taken care of, I think that [the CCNC staff’s] opportunity for programming and being creative just gets much easier,” Willmann said. “While they will absolutely be responsible for meeting the revenue marks that we’ve established, the ebbs and flows are not nearly as big of an impact because there’s a larger organization supporting [CCNC].”

Reilly—whose title will become nature center director with Willmann as her supervisor—says CCNC brought in approximately $120,000 from programming during the last fiscal year. When she took the job in 2013, program income was a third of that. Budget figures for the next six months are approximately $100,000, and for the next fiscal year CCNC has a $205,000 budget.

CARD has no plans to eliminate any offerings, Willmann says; rather, all eyes are set on expanding what’s being done. The CARD spring guide will include a nature center section with additional classes and camps.

The Chico Creek Nature Center is not the CARD Nature Center. Its lease and loan remain with CCNC. Willmann said her board did not want to take on the debt—still over $180,000, even after restructuring—so CARD was amenable only to an operating agreement.

Assistant City Manager Chris Constantin mentioned the idea of CARD involvement at a city-CCNC discussion last year, after the specter of default prompted the City Council to consider several courses of action (see “Money matters,” Newslines, May 22, 2014).

The council declined to forgive or forbear the loan. New negotiations commenced in June 2015.

The loan is interest-free for five years, then has a 5.24 percent rate, with quarterly payments. The lease, replacing an understanding that would have run though 2027, has a five-year term with extensions. The deals are linked; specifically, a missed loan payment would trigger default clauses in both the lease and loan contracts.

Constantin says the lease represents the first under new regulations passed Oct. 6 by the City Council, so there was “no template” to work off—even if this were a more conventional venture, not involving an added party.

“It was absolutely a three-legged stool,” Willmann said, “with all working together to work out what would be best for all organizations and for the community as a whole.”

The Nature Center, whose history dates to the 1970s, offers a range of programs: tours, classes, camps. It also rents out its facility, located in Lower Bidwell Park.

With CCNC run as what Reilly calls a “nonprofit business entity,” now backed by CARD, prospects seem stronger.

“CARD is a long-term solution to this problem,” she said. “They see the strides that we’ve made and see the opportunity to partner with us to get us to that next level that we need to get to in order to be long-term self-sustaining.”