Health club owner Al Sharpe (left) and physical therapist Damon Anderson are participating in separate actions against the Monterey Sports Center.

A young lawyer, set apart from the crowd by his suit and tie, stands up in front of the Monterey City Council and warns the elected officials to start paying attention. Rennison Bispham announces that he represents a consortium of local health club owners who feel the city is competing unfairly against them in its operation of the Monterey Sports Center. As the City Council prepares to launch a $7.5 million expansion of the popular facility, Bispham tells them his clients are serious people.

"They will not go quietly," he says.

Bispham, who addressed the meeting on Tuesday, August 7, is from the law offices of Lawrence Biegel, of Monterey. The firm''s client, Al Sharpe, owns the Garden Health & Fitness club, as well as Longevity for Women. Sharpe, who has been working with Biegel''s office for about three months, says he doesn''t really want to sue the city over what he alleges is unfair competition. He wants to explore options.

"We''re not intent on a legal suit," Sharpe says as he sits at his desk in the club on Garden Road. "We''d much rather have the city recognize us as a taxpaying industry and treat us on a level playing field."

Sharpe and four other area health club owners have banded together against the city, charging that the Monterey Sports Center skews the local health club market. As the center expands exercise facilities similar to those they offer, they see the competition as even more direct.

George Cullinan, owner of Carmel Fitness Center, says his complaint is "private business having to compete with a government-based entity.

"All the ordinary costs of business, they bury," Cullinan says.

Sharpe says he has not been able to raise his rates to match rising costs like utilities, because he has to stay competitive with the municipal gym. City officials are proud to note that the Sports Center hasn''t raised its rates since it opened in 1992.

"They recognize they''re competing with us unfairly, but they''re not going to do anything about it. They''re going to keep on going," Sharpe says. "They know the city general fund subsidizes the Sports Center, and as a consequence the revenues they have to earn to support the Sports Center are less than to even break even."

The city doesn''t dispute this. The sports center costs $2.4 million a year to run, $2.2 million of which is paid for by users. But the Sports Center pays no tax or rent.

At a recent City Council meeting, Sharpe called the expansion unnecessary. "Can''t the money be better spent on other services like police protection, homeless issues, energy conservation, et cetera, that benefits more people?" he asked.

Sharpe has also met with City Manager Fred Meurer. He offered to sell his club to the city as an annex to the Sports Center, but was denied.

Meurer says he can appreciate the club owners'' opinions, but thinks they''re wrong.

"We have a customer base that''s much wider than theirs," Meurer says. "We''ve got a different mission than they do."

Walk around the Sports Center with Meurer and fitness coordinator Bill Rothschild, and they''ll make a case for the expansion. The aerobics, cardiovascular and weight training rooms are crammed. And the place is packed with kids.

The Sports Center has a full calendar of youth activities. It also gives discounts to those in need. All that can''t be found at health clubs, Meurer and Rothschild argue.

"It''s a place anybody can go," Meurer says.

Though he concedes that the Sports Center doesn''t have to pay rent or taxes, manager Jeff Vierra doesn''t have much sympathy for grousing health club owners.

"Anybody can expand their business," he says. "It depends on how profitable you are and how you run your facility."

Sharpe and the other owners are not the only party with gripes against the Sports Center. Six local physical therapists, led by Charles Eldred of Cypress Coast Physical Therapy, recently sent a letter to Meurer claiming that the city has no place providing physical therapy services.

Another letter went to the fraud division at the state Department of Insurance asking investigators to look into billing practices at the Sports Center.

One of the therapists, Damon Anderson, says that while the Sports Center is good for the community, its mission should be limited.

"It should be for fitness and exercise but it shouldn''t have a physical therapy clinic," he says. "You don''t expect a city to start a health clinic and compete with current providers in the area."

Anderson and some other therapists recently spoke with city officials. During that meeting, he says, he learned that the city would not budge from its therapy services. Also during that meeting, he says he learned that exercise therapists--not licensed physical therapists--were evaluating patients. The physical therapists allege that the Sports Center bills insurance companies and workers'' compensation for rehabilitation treatment that can only be provided by licensed physical therapists.

The city officials told Anderson that they believed this practice was legitimate. He and the others don''t think so.

"We''re having a disagreement over what''s OK and what''s not OK," he says. "They have patients come in and they''re evaluated by a person who is not a physical therapist and then that person puts them on a treatment program. They''ve never seen a physical therapist."

Eldred, who used to have a contract to provide an exercise class at the Sports Center, has asked the state to look into the billing practices.

"A report was given to the Board of Quality Affairs, the Physical Therapy division, and also the state fraud division," Eldred says. "The local physical therapists are saying, you''re not doing it right. If you''re going to do it, do it right."

Bill Rothschild says the city brought in independent consultants to investigate the concerns of the physical therapists and got a clean bill of health.

Like Meurer, he disagrees with the private providers. "They put themselves in a position to compete with us, not the other way around."