Date: April 20, 2007

To: Ernie Shaw, Interim Director

From: Jimmy Gibbs, Aquatic Manager

RE: Adjustment of 2008 Swimming Pool Fees

Authorize consolidation of age categories and adjustment of daily admission fees at Lawrence Parks and Recreation swimming pools.

Background Information: The Lawrence Parks and Recreation Department has a strong history of providing a safe and inviting aquatic experience to the Lawrence community. We strive for the most professional staff, excellent customer service, superior programs and ability to maintain the highest quality aquatic facilities available. As operation and maintenance costs steadily rise, it is imperative that we enhance our ability to provide the current level of service while endowing the future needs of our facilities. I believe through a responsible series of admission and rental rate adjustments including sales tax support, we can insure that Lawrence’s award-winning aquatic programs, facilities and personnel are protected. Currently, aquatic facility operations are offset by user fees and subsidized through sales tax revenue.

Customarily, Lawrence City Commissioners have been directly involved with authorizing daily admission fees at LPRD swimming pools. Other fees including monthly and annual passes, discount punch cards, class fees and general rental rates have been determined by the Parks and Recreation Director and the City Manager.

The aquatics division donates on average over 7,000 free swimming passes to the community through local schools, clubs, and social service organizations. Donations have benefited organizations such as The Ballard Center, Lawrence Public Library Reading Program, CHIP Get Moving program, Boys & Girls Club, various local schools, SRS, Women’s Transitional Care Services and Bert Nash Mental Health Services.

Facts: Current daily admission fees, with the exception of the “child” category, were instituted in 2001. The “child” category was allowed to increase to $1.75 from $1.25 January 1, 2005. The present, 3-tier daily admission fees are:

· Toddlers 4 years and under: Free

· Children 5-12 years: $1.75

· Teen/Seniors 13-17, 60+ years: $2.50

· Adults 18-59 years: $3.75

The City has not adopted a User Fee Policy in regards to services provided by the aquatics division. Traditionally, admission fees have been set by determining what is affordable to the community along with a generous tax subsidy supported by the City Commission. This charitable approach, not a specific recovery rate or market comparison, is how the current fees were set.

Projections show that revenue from the sales tax will not increase adequately to parallel aquatic operation expenditures. The extent of future operation mostly depends on the funding options of the City Commission. These options are:

1. To position the facility to meet future aquatic demands of the public with high quality programs and maintenance plans.

2. To maintain the status quo.

3. To move backwards in regards to services, programs, safety and maintenance.

Increased revenue can be obtained through individual or a combination of the following actions:

· Increase revenue through higher user fees.

· Increase programs by targeting new user groups to create additional revenue streams.

· Increase tax support.

· Reduce expenses of operations by cutting services, hours of operation, programs and staffing.

We project that fixed overhead costs will continue to grow. These expenses generally include utilities, chemicals, administration, training fees and personal protective equipment. There are also certain identified dangers and risks associated to swimming in public pools (e.g. water safety risks, health risk from contaminated pool water, accidents). We project notably higher costs related to meeting the rising standards of water quality and sanitation.

Market Comparisons: For admission fee comparisons, we have defined the market as those local municipalities providing similar activities, facilities and amenities as what is available in Lawrence. This information shows Lawrence admission fees in comparison to market averages. It should be noted that Lawrence continues to charge significantly less for daily admission than comparable facilities in the local market.

Consolidating age groups and charging a single, per-person fee is also a strong trend in this market. Conventional wisdom indicates that the same level of safety and supervision will be afforded to every customer, regardless of his or her age. Expenses are directly associated with the number of customers, not the age of the customers. A single rate of admission also eases cash handling, reduces fee confusion and reduces long lines and wait times for customers entering the facilities. We currently offer a single rate on monthly and annual passes without regard to the customer’s age.

Initiative: The following table details recommended fees and expected revenue generated. We propose that a single daily admission rate for all age groups (child through senior) be adopted. This single daily admission rate would be set by the City Commissioners. Based on the approved daily fee schedule, additional fees such as monthly/annual passes, discount punch cards and competitive rental rates would be determined by the Department Director and the City Manager. These additional methods of admission (monthly/annual passes and discount punch cards) would continue to offer substantial discounts off daily admission. Annual and monthly passes will continue to be offered at a single rate for all age groups.

Item	Current Fees	Current Revenue¹	Proposed Fees	Expected Revenue²	Date of Last increase	Proposed Percent Increase
*Daily Admission Toddler	Free	$0.00	Free	$0.00	N/A	0%
*Daily Admission Child	$1.75	$64,664	$4.00	$147,804	1/2005	129%
*Daily Admission Teen/Senior	$2.50	$24,952	$4.00	$39,924	1/2001	60%
*Daily Admission Adult	$3.75	$97,413	$4.00	$103,908	1/2001	7%
*The above fees are customarily set by the City Commission

Monthly Pass All ages one price	$16/month (.53 per day)	$72,880	$20/month (.66 per day)	$91,100	1/2004	11%
Annual Pass All ages one price	$135/year (.37 per day)	$21,600	$155/year (.42 per day)	$24,800	1/2004	15%
Competitive Rental Per Hour	$55	$57,904	$60	$62,349	1/2006	9%
Projected Revenue		$339,413¹		$469,885²		38%
¹Revenue is based on average annual participation per age category from 2003-2006 using 3-tiered rates ²Revenue is based on average annual participation from 2003-2006 multiplied by a single admission rate

Action Request: Authorize consolidation of child through senior age categories into a single admission rate of $4 per person set by consensus of the City Commission. Once the daily admission fee is determined, adjustment of additional fees including monthly and annual passes, discount punch cards and competitive rental rates would be developed by the Department Director and City Manager.

Attach: Aquatics Revenue Potential