Keeping operational costs comparable will require entrepreneurial management

ORIGINALLY WRITTEN DON RATZLAFF
A half-cent increase in the local sales tax rate is not the only key to the economic feasibility of building the proposed family aquatic center, city leaders say.

“We’re confident that the half-cent sales tax will take care of the construction end of it, which is half the battle,” said Steven Garrett, Hillsboro city administrator. “The other half of the battle will be running the thing.”

Specifically, “running the thing” as a business that needs to generate revenue to cover as much of the center’s operational expense as possible-and those expenses will be higher than those generated by the current pool.

“We’re anticipating that it won’t double the cost of operating the current pool, but it will increase it significantly,” Garrett said.

“We know the added amenities of the new pool-like zero-depth entry and a water slide-will take a little bit more manpower. And we’re talking about expanding the hours of operation and the days of operation.

“So we know that personnel costs are going to increase,” he said, estimating that at least two additional lifeguards would be needed.

But staff is not the only expense that will increase.

“Of course, it’s a bigger pool,” Garrett said. “We’ll have adequate lighting and the water is going to be heated, so utilities are going to increase slightly.”

But he added, “We think with the efficiency of the new pool, it’s not going to be a huge increase (in utility costs) over the old pool.”

The representative working with Burbach Aquatics, the company that would build the aquatic center if it is approved, said modern pools can be run in such a way to cover operating expenses and even generate a profit.

Located in a small rural community, the scenario that a new aquatic center would turn a profit is less likely.

“I do not think we’re going to make money on it,” Garrett said. “There’s just no way in my way of thinking that we’re going to have enough visitation so we can make a profit. And we are unwilling to raise fees to a level that limit people’s ability to come.”

Garrett said his goal for a new aquatic center, at least in the initial years of operation, is that it would not drain more subsidy than the present pool does.

Last year, that subsidy was about $17,000. Expenses totaled just over $39,000 and revenue came in at about $22,000.

“The goal would be to not increase the subsidy and to decrease it if possible,” he said.

Revenue strategies

The key question, then: What are the city’s strategies for generating additional revenue to offset the projected increase in expenses?

“We’ve had lots of talks about that,” Garrett said in reference to the city council. “Certainly, the pool becomes a $2.5 million investment rather than just ‘the pool.’ Our management approach is going to have to be an important change.

“What we’re talking about is concession sales, and looking at the pool not just as a place to swim, but as a place for people to hang out and spend some time,” he added.

On the former theme, the selection of concessions will broaden beyond the usual pop and candy to include heartier entrees, such as pizza slices and other quick-order items.

Revenue from concession will increase as children and families make the aquatic center a place to relax and spend more of their leisure time, Garrett said.

The council’s vision is that the aquatic center will be a “one-stop shopping” center for all things swimming related, Garrett said.

That includes the possibility of planning special events.

“From my point of view, as a busy parent, I think it would be great if I could call down to the pool and say, ‘Hey, it’s my son’s ninth birthday. He’s going to have 10 friends. I want a cake, some hot dogs and drinks all around and someone to dress up like Elmo.’

“We want to make it a one-stop thing so it makes it easy for the family to come down,” he said. “That will be a big change for us.”

Another strategy for generating revenue will be to offer more activities that, in turn, will attract more aquatic-center users. Expanding the activity schedule will be possible in part because heating the water will enable the pool to be open both earlier and later in the day, and both earlier and later over the course of the summer season.

“What we’re looking at is additional services, compared to what we offer now,” he said. “For instance, it could mean providing more swimming lessons, and maybe more water-borne recreational programs in addition to swim team and water aerobics.”

Garrett said one revenue strategy that will not be pursued is a significant increase in admission prices.

“It concerns me about some of the information coming back to us about what we’ve supposedly decided,” Garrett said. “We haven’t decided what the (admission) cost will be. But the city council, being good business people, understands that it has to be affordable to families in our town.

“It will be properly priced.”

Garrett said the city will likely review its present pool policies regarding group rentals to make sure the city’s cost for such events are covered.

The change in operating philosophy will also mean an end to the tradition of issuing free season passes as a perk for city employees.

“That will be a thing of the past,” Garrett said. “It must be. That puts me in the same boat as everyone else-and I trump a lot of folks because I have three kids who love to swim.”

Staffing will be key

Key to the operational success of the aquatic center will be finding the right manager, Garrett said.

“It’ll have to be someone who’s creative and somebody who has some additional chops besides just being interested in swimming,” he said. “It’s going to be a whole new deal.

“It’s going to be almost a full-time job,” Garrett added. “We will expect the person to be available to prepare the pool for the upcoming season and think about additional programming as well as hiring personnel and taking care of the operational aspects of the pool.

“It’s not going to be a summer job anymore.”

Garrett said it will take the determination of the city council and the aquatic center staff to make the operational strategies successful.

“If we are going to make this investment (to build the aquatic center), we need to make the whole investment-and that is not just with the money, but with our philosophy that we’re going to have a great pool. And it’s going to take a person with creativity and some gumption to make that thing work right.”

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