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CITY OF PALM DESERT
CITY MANAGER'S OFFICE
STAFF REPORT
REQUEST: RECEIVE AND FILE THE 2011/2012 ANNUAL REPORT FOR THE
PALM DESERT AQUATIC CENTER.
SUBMITTED BY: Ryan Stendell, Senior Management Analyst
DATE: September 13, 2012
CONTENTS: 2011/2012 PDAC Annual Report
Recommendation
By Minute Motion, receive and file the 2011/2012 annual report for the Palm Desert
Aquatic Center.
Discussion:
Attached please find the first annual report for the Palm Desert Aquatic Center. Staff is
pleased with the 52% recovery outcome in the first year and will attempt to continue the
upward trending recovery rate. The attached report was reviewed by the Parks and
Recreation Commission at its September meeting. The Commission agreed with all
goals set forth by staff and added that increasing concessions revenue could also be a
worthwhile goal.
Staff will continue to update the Council on the operations at the Aquatic Center.
Submitted By: Revi and Concur:
Ryan Stendell aul Gibson, Finance Director
Senior Management Analyst CITY COUNCIL ACTION
APPROVED DI'MI?I)
Approval- RECEIVED OTHER
MEETING DATE - ( 3- a0 j _
AYF,S:-- -ncK,
John ohlmuth NOES: N
City a ager ABSENT: Fines �4
ABSTAIN: Nbne
VERIFIED BY: L
Original on File with City Clerk's O fice
- i ; _
2011 /2012 Annual Report
September 13, 2012
Presented by:
Ryan Stendell, Senior Management Analyst
Karen Creasey, Aquatics Manager, YMCA of the Desert
Annual Report 2011/2012
Palm Desert Aquatic Center
September 13, 2012
Executive Summa
The end of the first full year of operations is complete for the Palm Desert Aquatic Center, and staff is very
excited about the results. Total operational expenditures came in at $1,278,904.11, with a total income of
$665,091.00, yielding a first year's recovery rate of approximately 52%. The recovery rate of 52% is well in
excess of the pre -opening projection of 41-42% for year one. What does this mean to the City operationally?
Staff budgeted an amount not to exceed $750,000 (representing a 41-42% recovery) for year one to cover the
operations at the pool. The 52% recovery represents a general fund contribution of $608,015.11, which results
in a savings to the general fund of approximately $140,000 for this fiscal year.
In this annual report, staff intends to discuss the pre -opening business plan, safety, revenues, expenditures, and
a few surprises along the way. We will also discuss some of the facilities goals and ideas for continuing to
better ourselves at the Palm Desert Aquatic Center.
PALM DESERT AQUATICS CENTER
EXECUTIVE SUMMARY
FY 2011-2012
MONTH
PROJECTED
EXPENSES
PROJECTED
INCOME
I EXPENSES
I
INCOME
MONTHLY
I +!-
JULY
$ 140,424.67
$ 68,730.00
$ 126,087.59
$ 141.418.00
$ 15,330.41
AUGUST
$ 145,201.47
$ 61,545.00
$ 135,263.12
$ 98,335.00
$ (36,928.12)
SEPTEMBER
$ 98,702.05
$ 42,455.00
$ 115,103.82
$ 45,272.00
$ (69,831.82)
OCTOBER
$ 98,866.60
$ 44,286.00
$ 97,453.85
5 30,834.00
$ (66,619.85)
NOVEMBER
$ 89.342.65
S 27,980.00
$ 88,592.23
S 15,334.00
$ (73,258.23)
DECEMBER
$ 93.292.65
$ 20,285.00
$ 84,562.07
$ 12,877.60
$ (71,684.67)
JANUARY
$ 89.609.66
$ 39,430.00
$ 88,284.60
$ 16.748.00
$ (71,538.60)
FEBRUARY
$ 91,229.33
$ 31,935.00
$ 83,687.32
$ 19,551.00
$ (64,136.32)
MARCH
$ 96,976.25
$ 38,836.00
$ 93,816.28
$ 33,123.00
$ (80,693.28)
APRIL
$ 98,395.46
$ 47,535.00
$ 101,343.08
$ 82,647.00
$ (38,698.08)
MAY
$ 121,973.66
$ 46,835.00
$ 106.501.18
$ 69,213.60
$ (37,287.68)
JUNE
$ 140,349.47
$ 64,036.00
$ 162,410.97
$ 119,738.00
$ (32,672.97)
TOTAL
$ 1,304,262.90
$ 540 736.00 1
$ 1 273 106.11
665 091.00
608 016.11
Page 2 of 8
Annual Report 2011 /2012
Palm Desert Aquatic Center
September 13, 2012
Background:
The City Council has always set a goal for the Aquatic Center focused on providing for the needs of its
residents while minimizing the exposure to the General Fund. Cost recovery is seen as crucial for the long-term
viability of the facility. In that regard, the Council authorized staff to prepare a comprehensive operations report
(Ballard King Report) which outlined possible ways to achieve the desired 60% recovery. This operations report
became an important tool of staff in the months leading up to the grand opening, as you will read below.
As a contract city, the next step in the process was to select an operator for the facility. Staff developed and
released an RFP seeking a qualified operations team with strong recreational background. Applicants were
asked to submit a business plan for the facility with a strong emphasis on maximizing revenues. At the
conclusion of the RFP process, the Family YMCA of the Desert was the leader of the pack; in February of
2011, the City Council approved a management and operations contract with the Family YMCA of the Desert.
Many additional tasks needed to be carried out before the facility could be opened, including hiring of all staff,
contracts for maintenance, and initial purchasing for the operations team. All of the stars aligned and the grand
opening occurred on June 25, 2012, welcoming over 2,000 guests to the facility. It was clear from the beginning
that the City had created a facility that the Coachella Valley was thirsty for.
Safety:
Constant vigilance is the key to effective lifeguarding and a high safety record — never leaving a pool
unattended when patrons are present, effective zone scanning, supervisory oversight, and being rescue -ready
and highly alert at all times are some of the ways we have been effective in keeping people safe and out of
harm's way.
Selecting qualified staff was an important element towards the safety plan. Strong swim skills were required of
applicants, and many were swim team members and/or water polo players at the high school or college level.
All our lifeguards hold American Red Cross certifications in lifeguarding, CPR, and First -Aid and participate in
frequent in-service trainings and planned and/or spontaneous safety drills.
Daily swim tests were required and conducted for all patrons under the age of 18 who desired to use the diving
boards or swim in the deep water. These swim tests were highly effective and greatly reduced the need for
lifeguards to enter the water.
For a facility this size, our rescue and first -aid statistics are outstanding. Over the first year of operations, we
performed only a few water rescues that required a lifeguard to enter the water and assist a patron to the side.
No drownings or near drownings occurred. These rescues were distressed swimmers simply needing assistance.
First -Aid incidences were handled professionally and thoroughly, most commonly with a band aid and/or an ice
pack. Reporting was done, and EMS was called when necessary. An effective emergency action plan, First -
Aid and communication equipment, and well -trained staff played an important part in our success. The
lifeguards were outfitted with easily recognized uniforms as well as whistles and rescue tubes. The City of
Palm Desert generously donated radios to assist in two-way pool and deck communication and the Palm Desert
Fire Department outfitted us with a fully -stocked medic bag, back board, and AED. This equipment was all
essential and greatly appreciated.
Page 3 of 8
Annual Report 2011 /2012
Palm Desert Aquatic Center
September 13, 2012
Revenues:
Staff was pleasantly surprised to surpass the revenue projections found in the Ballard King Report in the first
year. In total, the Aquatic Center took in $665,091.00 in its first full year of operations. The most common users
1%
■ Daily Admissions $406,238.00
■ Program Revenue $115,732.00
• Food & Beverage $80,020.00
■ Facility Rentals $59,304.00
■ Retail Items $3,796.00
for year one was most certainly the daily recreation swimmers, especially in the non-resident category.
The highest volume of revenue came in the daily admission category, followed by programs and food and
beverage. Recreation swimmers were plentiful from the time the gates were opened at the facility, while others
(i.e. fitness swimmers) took longer to develop. Staff has seen a progressive increase in daily lap swimmers and
guests using the facility in a fitness function. The YMCA will continue to expand on programming
opportunities for these users, especially in the traditionally slow winter months.
Monthly Revenues:
Below is a snapshot showing the monthly revenue collection for year one at the aquatic center. The highest
month's revenue was $141,418.00 (July), and the lowest month was $12,877.50 (December). This is a
somewhat predictable model based on the weather and the predominant recreational swimmers. A marketing
strategy is being created to attract more off-season (October -March) swimmers, as well as summer time
recreational swimmers.
$160,000.00 ----
$140,000.00
$120,000.00
$100,000.00
$80,000.00
$60,000.00
$40,000.00
$ 20,000.00
Page 4 of 8
Annual Report 2011 /2012
Palm Desert Aquatic Center
September 13, 2012
Expenditures:
The total operations budget for year one was approved by the City Council in the amount of $1,304,264.00.
Total expenditures for the year totaled $1,278,904.11, which represents approximately 98% of the approved
budget. Expenditures for the facility are broken into the following categories: YMCA operations costs, contract
maintenance, and utility expenses. Total expenditures were kept below the total approved bottom line through
careful management of our allotted funds. Below please find a summarization of all expenditures of the facility.
■ YMCA Operations Costs: $913,641.83
■ Contract Maintenance & Chemicals: $278,893.84
Utilities: $86,368.44
YMCA Operations Costs:
Of the $1,278,904.11 total expenses, $913,641.83 was expended for services provided by the
YMCA of the Desert. The largest expense incurred from the YMCA is staffing costs (i.e.
lifeguards, swim instructors, concessions, etc.). In addition to staffing budgets, the YMCA has
budgets for food & beverage, janitorial, advertising, retail & program materials, and other
ancillary costs surrounding the operations of the facility. In addition, the YMCA charges a
monthly management fee for services rendered at the facility. Below is a breakdown of costs
associated with the YMCA's operations contract.
29,0 1,0r�0%
3%�7jjj;
■ Staffing Costs: $674.138.35
■ Management Fee: $150,000.00
■ Other Expenses: $31,375.91
■ Food & Beverage: $25,329.91
■ Insurance: $15,000.00
•Janitorial: $7,113.59
Advertising: $7,096.41
Program Supplies: $3,587.65
Page 5 of 8
Annual Report 2011/2012
Palm Desert Aquatic Center
September 13, 2012
Prior to the grand opening, staff utilized the business model given in the Ballard King Report to
generate the proposed operations budget. Due to the large volume of daily recreation swimmers
during summer months, staffing levels had to be increased to maintain a safe environment. This
presented some challenges, but with careful management by the Aquatic Manager and City staff,
we were able to protect the bottom line set by the City Council.
Contract Maintenance/Services:
The pre -opening management team set out to hire two contractors for the Aquatic Center, one for
daily cleaning and basic maintenance, and a second contractor to handle the annual maintenance
functions associated with the aquatics mechanical system. Staff was encouraged that this model
would keep costs low, as the daily pool contractor could be more of a "pool man" rather than a
technician. Unfortunately, this concept did not lead to the kind of savings we had envisioned.
Staff awarded the contract for daily services in the amount of $102,000.00 to Service 1st
Commercial Pools and a contract in the amount of $109,515.00 to Knorr Systems for annual
maintenance (including chemical acquisition). Staff did process a change order for additional
chemical acquisition with Knorr Systems due to a higher than estimated chemical consumption.
These costs are reflected in the actual expenses shown below.
It became evident shortly after our grand opening that the Aquatic Center was somewhat of an
attractive nuisance in the late night/early morning hours. Staff often found remains of night time
trespassers. Staff immediately contacted several local security firms and executed a service
agreement for night time security services. This was an expense that was not budgeted for but
staff was able to absorb into the budget.
Below is a breakdown of actual costs associated with contract maintenance and/or services:
3%
■ Service 1st Commercial Pools: $99,164.04
■ Knorr Systems Inc. (Chemicals): $86,344.34
n. Colt Security: $50,956.00
■ Knorr Systems Inc. (Maintenance): $34,299.96
■ Other Maintenance Costs: $8,129.50
Page 6 of 8
Annual Report 2011 /2012
Palm Desert Aquatic Center
September 13, 2012
Utility Expenses:
Staff relied heavily on the information provided to us in the Ballard King Report for budgeting
utility expenses. Fortunately, these forecasts were conservative enough to allow staff some
flexibility in the first year of operations. Total utility costs for the first year were $86,368.42,
with approximately 75% related to electricity. The facility was designed with a roof -mounted
solar system which was not finalized and hooked up until June of 2012 due to delays with the
contractor and utility companies. Staff would expect a much better annual electricity cost in year
two of operations. Below is a breakdown of utility expenses:
■ Southern California Edison: $64,308.83
■ The Gas Company: $12,357.88
Coachella Valley Water District: $6,910.44
■ Time Warner Cable (Telephone): $2,791.29
Surprises Along the Way:
There were a few surprises along the way, both beneficial as well as challenging but nothing we could not
handle with a bit of effort.
Overall Use: The number of people who enjoyed this facility from the very day it opened was on the
whole higher than initially expected. The year was projected to end with a 42% revenue recovery rate but, as a
result of a higher volume of projected users, we saw instead a 52% recovery.
Out of town usage: The number of people using the facility from out of the Palm Desert resident
jurisdiction was surprising and welcomed. The Ballard King study did not indicate the amount of "outside
usage" we enjoyed. People came from all over the valley, from all around the State, and with the snow bird and
vacationer influx, we saw use from across the nation and even from different parts of the world.
Off Hour Security: It did not take long, after opening, to recognize a need for overnight security. A
security contract company was employed to keep the facility free from users jumping the fences after hours.
The security we have implemented has been successful in its mission.
25 punch card success: The punch card has been better received by the public than expected. Because
of the pass success, there is room to develop an entire marketing campaign around it.
Page 7 of 8
Annual Report 2011/2012
Palm Desert Aquatic Center
September 13, 2012
Non Swim Suit Apparel: The number of patrons who came and continue to come to use this facility
without swim suit apparel has been a surprise. A significant population wants to swim in street clothes (shirt
and shorts) and not wear a swim suit. In an effort to keep the water clarity clear, the filters clean, and the
reputation of our facility positive and clean, we ask that swim wear be worn to swim here. We have had
success selling suits at the front desk for those who need them.
Recreation Pool Mechanics: The recreation pool has needed more care than we originally expected.
The higher than expected volume of swimmers using that pool has created the need for us to keep an eye on its
mechanics in order to keep it operationally balanced.
Leak 50 Meter: A leak was discovered in the 50 Meter pool that needed repair. The City worked with
the contractor for the Aquatic Center and had the leak tested and ultimately repaired. There was a short shut
down period of that pool, and the leak was sufficiently repaired.
Conclusion:
Year one at the Palm Desert Aquatic Center can be deemed a successful year. Staff is extremely pleased with
the outcome, but, is using this year as a baseline for future years growth. The realities of opening this facility
concurrent with an accelerated construction schedule did not leave staff with much time to mount an effective
advertising scheme. The visits to the facility were really what the market produced by word of mouth and media
attention. Staff looks to build on year one with a focus on bolstering the off-peak months by further reaching out
to the competitive swimming market.
GOALS FOR 2012/2013 SEASON:
* Expand the 10:00am — 2:00pm M-F fall, winter, and spring programming.
* Expand programs at the facility to include land -based fitness programming.
* Obtain and Install Colorado Timing System.
* Host at least three large "head -in -bed" swim groups from out of the area.
* Host 4 outside college team training camp venues.
* Become nationally recognized as one of the best pool facilities available in terms of outdoor
pool water clarity and pool space/programming use.
* Become a training center for swim and fitness programming, American Red Cross Classes,
Aquatic Facility Operator Course, etc.
Page 8 of 8