HomeMy WebLinkAboutFINAL PDAC Fee Presentation 013023 SM LUPALM DESERT AQUATIC
CENTER
FEE ANALYSIS
Potential Fee Adjustment & Cost Recovery Discussion
PDAC FEE HISTORYThe Palm Desert Aquatic Center (PDAC)
fees were established in 2011 and have not
been adjusted since inception.
Rising operational costs and future capital
project plans prompted a fee analysis
YMCA
INVOLVEMENT
•YMCA partners with health
insurance providers to offer
cost relief for those with fixed
incomes
•City receives all revenue,
including concession sales
•YMCA receives administration
& management fees
The Family YMCA of the Desert has been
the operator of the Aquatic Center since
its opening in 2011. Started in 1982, this
501(c)3 charitable community service
organization has provided excellent
service to the city in daily management
and operation. The YMCA also offers a
variety of aquatics programs for patrons
of the facility. Award of a new contract
with YMCA is anticipated in February
2023.
REGIONAL COST & AMENITY COMPARISON
The Cove, Riverside The Drop Zone, Perris
REGIONAL COST & AMENITY COMPARISON
$4
$6
$25 $25
$33
8
4
8 9
5
$0
$5
$10
$15
$20
$25
$30
$35
PDAC Jurupa Park The Cove Water Park The Drop Zone Splash Kingdom
Resident Adult Day Pass Number of Amenities
LOCAL COST & AMENITY COMPARISON
Fritz Burns Pool, La Quinta Palm Springs Swim Center
LOCAL COST & AMENITY COMPARISON
$4
$5
$3
$4
8
2 2
3
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
PDAC Palm Springs Swim Center Fritz Burns La Quinta Pawley Pool
Resident Adult Day Pass Number of Amenities
PDAC ADMISSION HISTORY
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Resident Adult Resident Youth/Senior Resident Junior Non-Resident Adult Non-Resident Youth/Senior Non-Resident Junior
•Majority of admissions have been from non-residents since 2011
•Admissions expected to return to pre-pandemic levels in 2023
•5-year pre-pandemic average used to project future attendance
CURRENT FEE BREAKDOWN
Admission Type Resident Non-Resident
30%
70%
Resident Non-Resident
•Fees were established to achieve a 60% cost recovery rate (Reso. 2011-32)
•Cost recovery is down to 33% at end of FY 21/22 due to increased operational costs
•All costs not recovered through fees are subsidized by General Fund ($1.8M budgeted for FY 22/23)
GENERAL FUND SUBSIDY
Fiscal Year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23
General Fund Subsidy $503,641 $683,341 $613,833 $657,877 $709,937 $794,884 $1,026,000 $1,400,500 $1,805,294
(budgeted)
Cost Recovery %63%56%59%59%58%40%26%33%32%
(estimated)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
General Fund Subsidy to PDAC
14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23
Costs not covered by admission fees must be subsidized by General Fund dollars
Main Cost Drivers:
•Facility repairs and maintenance
•Upcoming expenditures to keep facility
attractive and competitive
Assumptions for Analysis
Attendance in 2023 and beyond will return to pre-pandemic levels (5-year average)
Capital costs will be covered by the General Fund
Operating expenditures will increase 4% per year
Other program/food/retail revenues will level out to pre-pandemic averages
(fees not set by city)
TO ALIGN WITH CURRENT RESOLUTION
60% Cost Recovery
OPTIONS ANALYZED BY STAFF
Option Impact to Patron
Experience
Impact to Fees Impact to Cost Recovery
1. Fees remain the
same
No impact No impact •Cost recovery increases slightly in
2023 due to increased attendance
•30% cost recovery range by end of
year 5
2. Immediate
increase to 60%
cost recovery
Largest immediate
impact on fees
Increase by approx.
250% immediately,
no additional
increases for 5 years
•Initial increase to 60% cost recovery
•Reduced cost recovery by end of
year 5 due to rising expenses
3. Set fee at 60%
recovery, gradual
increase to get
there
Gradual impact on
fees through annual
increases
Increase an average
of 25% per year over
next 5 years, with
greatest increase in
initial year and softer
increases to follow
•Fees are set using 60% cost recovery
rate at current-year costs
•Incremental increases year-over-year
to reach fee amount
•Overall recovery rate levels around
40% due to increasing costs, 5-yr GF
subsidy approx. $7.2M for ops
IMPACT ON FEES
Fee Options Analyzed
Option 1
(Fees
remain
same)
Option 2
(Immediate
increase to
60%
recovery)**
Option 3 (Gradual increase of fees,
average recovery rate of 40%)***
Admission Type Year 1 Year 1 Year 1 Year 2 Year 3 Year 4 Year 5
Resident Adult 4.00 13.00 5.50 7.50 9.00 11.00 13.00
Resident Youth/Senior 3.00 9.75 4.25 5.50 7.00 8.50 9.75
Resident Junior 2.50 8.25 3.50 4.50 5.50 6.50 8.25
Non-Resident Adult 6.00 19.75 9.00 12.00 15.00 17.00 19.75
Non-Resident
Youth/Senior 4.50 14.75 7.00 9.00 11.00 12.50 14.75
Non-Resident Junior 3.75 12.25 5.75 7.75 9.75 11.75 12.25
**Option 2 cost recovery % would drop below 60% after year 1 unless an inflator is built in
***Option 3 spreads the increase over 5 years, ultimately averages out to 40% recovery rate
GENERAL FUND SUBSIDY
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
General Fund Subsidy to PDAC
14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28
Assuming a 5-year ramp up of fees to 60% cost recovery
GF Subsidy
$1.4M in
FY 27/28
Current
fiscal
year
ADDITIONAL CONSIDERATIONS
Raising Non-Resident Fees more than Resident Fees
•Shifts the cost increase
burden from residents
to non-residents
•May affect attendance
due to heavy non-
resident usage
Raising Fees on Annual Passes & Punch Passes
•Consider increasing
punch passes and annual
passes proportionately
•25-punch passes & 3-
month passes are the
most popular options
•Annual passes rarely sold
(less than 10 per year)
Other Options
•Establish a different recovery
rate (not 60%)
•Decreased recovery
rate would increase GF
subsidy
•Increase promotional
programs or incentives
TO SELECT A DIFFERENT RECOVERY RATE
Other than 60%
SENSITIVITY ANALYSIS
1) What would high/low fee levels look like in each 10% recovery rate bracket?
2) How much General Fund subsidy would be required at each level?
•Full analysis included in
supplementary documentation
•Cost recovery %’s maintained
year-over-year
PARKS AND RECREATION COMMISSION
Presentations given to Commission on 8/2/2022 and 2/7/2023
Commission provided recommendation to City Council
Fees for Aquatic Center should be increased
New amenities should be considered to increase cost recovery
Additional discussion scheduled for April 4 Commission meeting
POLICY CONSIDERATIONS
1) Should PDAC fees be increased? If so, what model
should be used (immediate or ramp-up)?
2) Should the designated recovery rate be changed from
60% to a new rate?
3) Should the recovery rate include only operations &
maintenance, or include capital improvements as well?
QUESTIONS?
THANK YOU!