ALAMEDA -- The City Council will consider extending its agreement with the Alameda Unified School District for operating the Island's swim centers Tuesday, a proposal that comes as city and district officials are negotiating a possible loan for upgrades at the Encinal High School pool.

The joint operating agreement, which calls for the city and district to split the cost of maintaining the swim centers at Alameda and Encinal high schools, is set to expire Oct. 21.

About $1.9 million is needed to renovate Encinal's swim center, according to Aquatic Design, the district's consultant. The center features a heated outdoor pool and is used by the school's swim and water polo teams, as well as the public.

Last month, the council OK'd loaning the district $1.15 million to help pay for upgrades, which would include removing the center's diving pool and building a single competition and diving pool. But after reviewing the city's loan offer during a closed session, district trustees told Superintendent Kirsten Vital to go back and continue working with city representatives over its terms

City Manager John Russo is urging the council to approve extending the current one-year joint operating agreement, although the council would still have to decide on an expiration date.

"This extension will provide additional time for the negotiations (on a loan for renovations)," Russo said in a background report. "It will also allow pool operations to continue for the school teams, community aquatic teams, and city programs."

City and district officials have been looking at ways to pay for upgrades at the Encinal pool and at the Emma Hood Swim Center for about two years.

The council approved the joint-operating agreement with the district in June last year after Alameda voters rejected a proposal to raise the city's sales tax to help pay for a new swim center, the construction of an emergency operations center and other projects.

The cost of keeping the swim centers open is about $308,000 annually, Russo said, with the city picking up the tab for about $154,000. While both sides pay for ongoing maintenance, the district is responsible for any major repairs or capital improvements, which is why it's now seeking a loan for the upgrades.

The terms the city offered the district was for a 10-year loan with a 4 percent interest rate, or for the district to pay $142,000 annually. It also called for the district to put up security.

District officials, on the other hand, asked for an interest rate of between 1 percent and 2 percent, and for the district to face a financial penalty if it failed to make a payment instead of having to put up collateral.

The district also wanted a Memorandum of Understanding instead of a loan to protect its credit rating.

The money for the city's loan would come from its equipment replacement fund.

Vital told the school board during last month's closed session that she was confident both sides could reach agreement, Trustee Neil Tam said.

If they cannot reach agreement, however, the district could seek the money elsewhere, while city officials said they would likely explore the feasibility of building a new pool at Alameda Point.

Reach Peter Hegarty at 510-748-1654 or follow him on Twitter.com/Peter_Hegarty.

IF YOU GO
The City Council will meet at 7 p.m. Tuesday in the Council Chambers at City Hall, 2263 Santa Clara Ave.