Will proposed Tri-City aquatic center soak taxpayers?
On a hot summer day what could sound better than a state of the art indoor/outdoor aquatic center and water park to cool off in? How about one that doesn’t require permanent and ongoing taxpayer subsidies, even under the best case financial projections, to stay afloat.
Unfortunately, the proposal voters are being asked to consider on August 6 would do just that. Kennewick, Pasco and Richland will decide whether to authorize a sales tax increase of 0.1% to build and operate the new water facility.
To its credit, the new Tri-Cities Regional Public Facilities District (TCRPFD) is being very upfront that the proposed aquatic center in Pasco is expected to run at a 12% operating loss requiring approximately $400,000 a year in taxpayer subsidies to stay in the black.
- “The annual operational expenses are projected at $3.4 million annually, including 12 fulltime positions, variable part-time and seasonal positions; plus a set aside for future equipment replacement. Revenues from user fees and concessions are estimated to generate approximately $3 million annually leaving an estimated annual operational shortfall of $400,000 per year (about 12%). The TCRPFD Board estimates that there will be sufficient revenue from sales tax proceeds to cover the projected operating loss.”
Market Constraints (emphasis added)
- “The fees being paid at most facilities for recreational swimming are at the low end of the spectrum that will not allow for a more aggressive fee structure at a new Tri-Cities Aquatic center.
- Most competitive swim teams are also paying very low fees for the use of pools. This will also affect the fees that will be able to be charged at a new competitive pool.
- Because there is a reasonably small competitive swimming market currently in existence, it will take some time for the growth to reach a level to adequately support a 50 meter pool.
- Despite the excellent market for a new Tri-Cities Aquatic Center, the reality is that the facility will not be able to cover its cost of operation by revenues generated from the facility.”
Where exactly are those “marked constraints” coming from? Existing public and private water centers. As noted by contracted feasibility study:
“While there are not any indoor public pools in the market area, there are a significant number of outdoor public pools in the Tri-Cities area.”
- City of Pasco – Memorial Pool
- City of Richland – George Prout Memorial Pool and Bader Mountain Splash and Play
- City of Kennewick - Kenneth Serier Memorial Pool and various aquatic playgrounds
The study goes on to say:
- “The other provider of aquatics facilities is the private sector. With the lack of public indoor facilities, the private sector has taken on the unusual role of being the primary provider of indoor aquatic facilities in the Tri-Cities area”
- Columbia Basin Racquet Club
- Tri-City Court Club
- Kia Ora Health Club
- Gold’s Gym
- Lifequest (Long range plans for indoor pool)
The study continues:
“In addition to the private pools that are noted above, many HOA’s in the Tri-Cities area also have small outdoor pools that are available to their residents. At one time there was also a large private outdoor water park (Oasis Water Park) which has since closed. However, there have been some continued discussions about possibly developing another similar facility somewhere in the Tri-Cities area in the future.”
Besides the availability of existing water centers perhaps the most challenging aspect for this project is this finding of the contracted feasibility study:
“A goal of consistently covering 80-90% of operational expenses with revenues should be attainable but there is virtually no possibility of recovering all operating expenses through facility revenues. However, it must be realized that virtually all indoor/outdoor aquatic centers that have been built in the last fifteen years are not covering their operating expenses with revenues.”
After the debt fiasco in Wenatchee a few years ago – in which the community’s new arena struggled to meet its financial obligations – lawmakers passed a law requiring Public Facility District proposals to receive an independent financial feasibility study. According to the state Department of Commerce, however, that independent study won’t be available until after taxpayers are asked to approve a permanent sales tax increase to not only build the proposed aquatic center, but also cover its operating losses estimated to be at least at 12% a year.
The question taxpayers are being asked to decide on Aug 6: Is it worth permanently tying up this new taxing authority to cover the proposed aquatic center’s construction and operating loss or should the TCRPFD instead come back with a new proposal that doesn’t demand ongoing operating subsidies from taxpayers but instead is focused on paying for just the capital expense of a project that can carry its own weight with user fees, concessions, and private sponsorships?