Ask ELi: Does the Family Aquatic Center Pay for Itself?

Monday, August 14, 2017, 7:07 am
By: 
Alice Dreger

Here at East Lansing Info (ELi), we run a regular featured called Ask ELi to Investigate. We take reader questions and work on providing answers.

Today we are addressing this message from an ELi reader: “I have wondered if, over the years, the EL Aquatics Center (outdoor community swimming park) has sustained itself or if it’s necessary maintenance, upgrades and staff require it to ‘dip’ into other city funds. Thank you.”

To answer, we contacted Tim McCaffrey, Director of Parks, Recreation, & Arts. (McCaffrey had the City’s Finance Director Jill Feldpausch confirm one of the figures on the bond for us.)

Here is how the costs of the Aquatic Center break down:

Construction of the park happened via a $3 million voter-approved bond:

East Lansing voters approved General Obligation Bonds to cover the cost of constructing the Family Aquatic Center, which opened in the summer of 2001. All of the bond proceeds were used for construction of the Family Aquatic Center. The bonds, for $3 million, were issued in 1999 and were refinanced in 2009. They’re due to be paid off in 2019.

In the most recent fiscal year, 2017, the City paid $260,900 for the debt payment. That means that is about how much City taxpayers are currently contributing to pay off the voter-approved construction debt.

The park has been operating at a deficit:

According to McCaffrey, “In the first 16 years, our total operating revenue was $6,749,000 and our total operating expense (staff, equipment, supplies, utilities, maintenance, equipment replacement, and etc.) was $7,081,000.” That amounts to “an operating deficit of $332,000 or an average of about $20,750/year.”

McCaffrey notes that, given a population of about 48,500 people, that means the operating cost came to about 43 cents per resident per year.

According to McCaffrey, “In 9 of the 16 years” that the park has been open, “we experienced more operating revenue than expenses and in 7 of 16 years we experienced more operating expenses than revenue.”

When there has been a deficit, “Operating expense deficits have historically been covered in the General Fund transfer to the Parks and Recreation Operating Fund.” The General Fund is funded primarily by taxes collected by the City.

The potential for deficits for operating the Aquatic Center may reasonably be expected to rise in the coming years:

The Aquatic Center is getting to the age where it may be needing more expensive repairs. For example, the City recently had to replace the boiler, and that resulted in a cost of $131,500 that came out of the City’s General Fund. (The figures given above for yearly averages and totals do not include that cost because it occurred in Fiscal Year 2017 and, according to McCaffrey, “FY2017 information is not complete at this time.”)

The park is also bringing in less revenue. In April, at a special budget work session, as ELi reported, “McCaffrey explained to Council that the extended public schools calendar, required by the State, is cutting into attendance at the Family Aquatic Center, which means less revenue there. He said the change in the school schedule is also interfering with the Center’s ability to be staffed, since many of those employed are high school students. He said at this point the Center’s season is effectively two to three weeks shorter than it used to be in terms of revenue.”

 

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