Jan 26 2011

Free Community Pools, Unicorns and Other Myths

Piedmont Civic Association Editorial:

The Piedmont Swim Club public-private partnership was an efficient and cost-effective model for years.  We bought memberships when our kids were toddlers learning to swim – enjoyed the pool as a family for a number of years – and usually sold the membership when our kids’ interests turned to tennis or soccer.  We counted on a new young family in town to buy our membership, repeating the cycle.  In years past this is the way memberships transferred from one family to another, though a more recent policy has discontinued the practice of allowing families to transfer memberships, replacing them with a non-refundable initial fee.

Recently, however, the specter of our community pool closing hangs over the Piedmont Swim Club (PSC) like the Sword of Damocles.  Piedmont’s long-standing tradition has ground to a halt and memberships languish due to the City’s refusal to offer the stability of a lease longer than three years. Though memberships have always been available for purchase by any family in Piedmont, fewer are willing to participate when their buy-in is more likely to be lost than transferred.  Membership has been declining to the danger point as the City repeatedly denies PSC a long-term lease.

A few residents have urged upon the community a “free community pool”.  Unfortunately, talking about “free” pools is the equivalent of discussing unicorns.  They do not exist.  Every pool costs (lots of) money to operate.  So, sadly, debating whether our community should enjoy a “free” community pool is no more fruitful than hunting for unicorns.  Instead of discussing mythical creatures, we must forthrightly discuss two issues – how pool costs may be minimized and who will pay those costs.

Delightfully, under Piedmont’s traditional system, the families who enjoy the pool pay for the pool.  Swimmers pay for swimming.  Moreover, more than a few of these energetic swimmers volunteer hours and hours of their time to help manage the pool – with the same generous spirit of volunteerism that runs through our schools, citizen committees, and non-profit organizations.  As a result, this particular community activity is available to residents at the lowest possible overall cost: in fact, the City’s consultant has indicated these volunteers are saving the City (and its taxpayers) $250,000 to $350,000 per year – the estimated annual additional cost to the City of running the existing pool if it should be so unlucky as to take over management.  Thus, the only way to lower costs further for swimmers would be to shift costs to non-swimming residents.

Should PSC Pay Rent to the City? Piedmont’s traditional co-op type model is a low-cost model for a community pool which many other cities and counties are turning to as they face fiscal shortfalls.   Charging PSC rent for the land is difficult to justify under this operational model – it simply raises the cost of this community activity to our residents who like to swim.   Tennis players and soccer players are not expected to pay rent for the land their courts and fields monopolize.  Should swimming be treated differently from other community activities and be charged rent?

City activities are normally run at the lowest possible cost for the benefit of our residents, not to raise money for the City, nor to force a particular group of residents to bear what is rightfully a pubic cost – pool time for school teams.  As long as the pool facility is run as a community activity for the benefit of the residents of Piedmont, available to any Piedmont family, there seems to be no reason to artificially raise its cost to our residents.

Other financial models: Both private market-rate and public municipal-run options might be explored in lieu of Piedmont’s volunteer-based, private-public facility.  Theoretically, what financial advantages and disadvantages could other alternatives offer?

The “Market-Rate” Model

  • the City expects the highest possible rent for the land and facility
  • a business operator pays rent and runs the pool to maximum profit*
  • pool time is offered at market rates to whomever is willing to pay, including non-residents

The Public Taxpayer-Funded Model

  • the City takes over the pool
  • costs increase up to $350,000 per year to taxpayers for the existing facility (more for an expanded facility)
  • taxpayers, rather than swimmers, pay for swimming

The Market-Rate Model: All things being equal, the Market-Rate concept maximizes rents to the City, but increases the cost of pool time to residents.  Although swimmers continue to pay for swimming, as is traditional in Piedmont, families may object to the conversion a low-cost community activity into a revenue-generating mechanism for the City.  Would most residents prefer this community activity continue to be available to Piedmont families at the lowest possible cost – or prefer to use it to generate maximum revenues for the City? 

In addition, any market-rate enterprise intent on maximizing revenues and customers may tend to increase traffic and parking needs in the area, impacting the high school, the middle school, Havens, Piedmont’s emergency facilities, and the residents in the neighborhood.

This option illustrates the problem with the City demanding rent from PSC – essentially it is equivalent to treating it as a commercial enterprise, forcing it to maximize revenues and customers, rather than serving residents as a community activity.  Or, to look at it another way, forcing PSC volunteers, who save the City up to $350,000 per year, to put in even more time and effort in order to generate revenues for the city, as well.

The Public Taxpayer-Funded Model:  This concept results in higher pool costs, even for the existing facility, due to employee salaries, health benefits and pensions.  In addition, some or all costs, sooner or later, may be shifted to taxpayers. Is shifting the costs of swimming to taxpayers smart?  Equitable?   Something our community favors?

From an economist’s standpoint, disconnecting the payment for an item from the right to receive it tends to promote escalating costs.   Thus, purposefully dismantling the current connection between those who swim and those who pay for swimming may increase cost growth rates, in addition to increasing costs initially.

Some residents who believe in free community pools urge the community to build a new expanded facility.  Although this would increase overall pool time, it would also magnify the negatives of the public option, rather than change them.  Ultimately, this model boils down to higher user fees for swimmers and/or higher taxes for all families.

Since advocates of a free community pool, however well-meaning, cannot give the community a unicorn, their actual proposal – increasing pool costs and possibly shifting those costs from swimmers to taxpayers – should be discussed openly and honestly:  Can the City afford $350,000 per year in extra costs to run the current facility?  Do taxpayers want to?   What new taxes or user fees would expansion involve?

Advocates for a public pool facility may convince two-thirds of the families in our small community to fund the higher costs of a City-run facility – or to build an expanded facility with new taxes.  It is fair for them to try.  On the other hand, it seems unfair to obscure the financial choices facing our community by talking about unicorns: a “free” community pool.

The families in our community should begin a direct discussion of the advantages, disadvantages, and equities of any pool – existing or enlarged – and work toward a consensus grounded in financial realities.

The first step in this process would be to stabilize our current public-private model, the PSC, by providing it with a long-term lease.  Without a long-term lease, our community will have only 1 option:  the City will be forced to run the existing facility, imposing new user fees to pay for it – or shifting costs onto taxpayers – or both.  With a long-term lease, all options remain open, since the lease may be terminated at any time by mutual agreement.  The only prerequisite would be involving the PSC, one of the major stakeholders, in the community discussion – which is only fair.

A long-term lease will allow any community interest in expanding swim facilities to start with financial realities, community consensus, and perhaps some private donations for an expanded facility, while preserving the public-private partnership that has worked so well for so many Piedmont families over the years, allowing us to watch our children transform from toddlers into teenagers at our local pool.

Editor’s Note: *Discussion of a commercially run pool complex is for illustrative purposes since zoning, deed, and/or other restrictions may present obstacles to, or prohibit, any for-profit use of pool facilities.  In addition, hybrids of these basic models are not discussed in order to more clearly highlight the financial distinctions between private, private-public, and public models.

One Response to “Free Community Pools, Unicorns and Other Myths”

  1. Right on! Thank you for a realistic portrayal of the issues and costs. The Piedmont Swim Club is providing a lower-cost pool for our community (certainly cheaper than the Claremont Resort or Sequoyah Country clubs), enabling school swim programs, *and* saving taxpayer dollars. I hope that every member of the city council receives a copy of this editorial and votes to renew the Piedmont Swim Club lease.

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