In this post, I sum up:
- what happens next (Monday December 9 Town Council meeting)
- a quick look at the revised operating cost estimates for this meeting.
- a few brief notes on small topics.
a. The Monday December 9 Town Council hearing.
This Monday, December 9, Vienna Town Council will decided on whether or not to raise the meals tax one cent, from three cents to four cents on the dollar. For the next decade only. That item is last on the Town Council Meeting agenda (click here for meeting page), and is scheduled to take 15 minutes, starting 8:55 PM, at Town Hall.
The actual schedule may vary. There are a couple of other big items, including the Town’s regulations on mother-in-law suites (ALUs), and changing the way the meals tax is collected for special events.
Many will interpret a “yes” decision on raising the meals tax as greenlighting the proposed Vienna pool/gym. That’s the way I see it. Others may tut-tut that no decision on the actual pool has yet been made. Others are technically correct, but, practically speaking, I’m sticking with what I just said.
In fact, legally, I think that has to be true, because you can’t just arbitrarily tax people and hold the money. Not in Virginia, anyway. We are planning to collect a tax surplus with that additional cent, and not spend it. The only way that’s legal is if we explicitly say what we are holding (and not spending) that money for. At the minimum, I’m guessing that there will have to be, as a matter of legal necessity, an account, on the Vienna Town Books, with money in it, and the Vienna Pool/Gym name on it. (The old-fashioned term for such an account is, I think, a “sinking fund”, but I’m sure there’s a more modern term for it.)
Plus, what a pain if you collected the tax, but decided not to build the pool. Whatever you do after that is going to involve some monkeying around with something. Rebating it, or cutting the rate to 2 cents temporarily, or I don’t know what. Not to mention going through the political damage of increasing taxes, only to end up saying “never mind”.
So, practically speaking, I’d equate a yes decision here with greenlighting the facility. Or greenlighting it absent some sort of catastrophic discovery, e.g., that the ground at “The Annex” is unsuitable for building a pool.
And conversely, I’ve argued that a “no” decision does NOT mean this idea must get shelved for a decade. That seems to be the official party line — do this right now, or wait a decade. But that assertion is contradicted by simple arithmetic (Post #2055).
The “public” part of this process of raising the meals tax — as in listening to comments from the public — is closed. Pretty sure that closed with the deadline for emailed comments being the Wednesday before Thanksgiving.
Now they have to discuss and decide. They can vote yes on the resolution to raise the meals tax, vote no on it, or modify it in some significant way, then vote. Plausibly, I guess they could table it to the next meeting, or the legal equivalent thereof. But I don’t see any indication that’s expected to happen.
b. Staff presentation for the 12/9/2024 Town Council meeting: Revised financial projections.
Source: See link below for meeting materials.
The important changes that I see, relative to the prior financial analysis sent to Town Council, are the following:
- The main financial projection now shows 50% operating losses ongoing, as shown just above.
- There is talk of other, yet to be determined, revenues, beyond those included in the current revenue projections. But no specifics.
To get to the new financial analysis, follow the link on the page for the meeting ( 1. 12.09.24 FINAL Annex Facility Funding update 12-3-24 ), which gives you a .pdf file with Staff’s slide presentation on the financials.
The slides in this section are mostly drawn from that, with my annotations in RED.
I note in passing that the original projections of 15% losses (85% cost recovery) are now outside of what is now listed as industry norms. So in hindsight, that was an exceptionally rosy scenario, as it seemed on its face.
I have a minor issue in that, after listing the industry norm for cost recovery as ranging from 35%-50% (= operating losses of 65% to 50%), that 50% loss scenario is then consistently termed as “conservative”. Which, based on what the slide just said, shown above, it is not. (I believe the use of “conservative” here referred to the hypothesized additional revenues which were not shown.)
Separately, I found this slide (above/below) to be baffling. It seems to show money from heaven, on the NEW reserves line. These NEW reserves apparently completely fund the operating deficit?
I have to assume this is aspirational, in that they expect some as-yet-unnamed revenue source, or perhaps a white knight, or naming rights, or something? Because if they literally mean drawing down the Town’s reserves to cover this operating deficit, that’s … I don’t think that’s what they mean.
At one point the slides list ” … partner contributions, sponsorships, partnerships, or other rental considerations.” On another slide, there were ” … capital campaigns, sponsorships and program refinements during the construction period.” I don’t know if that means they have tons of money already lined up, and are just not ready to disclose it, but I suspect this just means that they’re promising to gear up and see if they can find that money.
Finally, with regard to cost recovery, discussion still ignores the elephants in the room, that is, the three nearby REC Centers and their 100% cost recovery.
And how do I reconcile the presence of 100% cost recovery, for the REC Centers, with “industry norms” of 35% to 50% cost recovery (that is, operating losses of 50% to 65%). Is it possible that those are the industry norms, for small facilities of the scale planned by Vienna? That’s how I reconcile them, by the presence of significant economies of scale. Almost like a physical law, economies of scale seems to explain way too much to be ignored in this market. Occam’s razor say that if we are to make simple sense of the market for REC-Center-like pool/gym facilities in this area, then our best explanation of how things work starts with an assumption of significant economies-of-scale, between (say) 1/3 REC Center sized and full-sized REC Center. Tripling the size results in a halving the average cost per person served. Or something like that.
I mean, I’m glad to see a REC Center mentioned in these slides. But it still seems a bit grudging. Aside from omitting the fact of 100% cost recovery (no operating losses) by the REC Centers, the REC Center membership fee is listed as giving access to Oakmont, when it in fact gives access to all nine REC Centers including Oakmont.
I nitpick.
The REC Centers have a 15% off sale every January (reference). As their competitor, we’d need to be aware of that in pricing discussions.
Anyway, 50% operating loss is about what I’d expect, based on my analysis that “taxpayers pay for scale inefficiency” in this case (post #2052). If Vienna runs its one-third-scale facility just as well as Fairfax runs the REC Centers, in the sense of collecting the same revenue per square foot of facility as Fairfax does, then a 50% operating loss lines up with our only available estimate of economies of scale here.
That said, if you put that, on an equal footing with the roughly $26M (plus cost-of-land) capital cost, the commitment to keep the facility running is worth about $50M in net present value, or maybe twice the cost of building the new facility in the first place.
This is, at root, what 2014 Town Council members Polychrones and Kelleher were warning about, in having to compete against the Fairfax REC Centers, when the Vienna facility would be operating at an inefficiently small scale.
That amount of money — the operating losses — is enough that it should matter to Town Council, as it deliberates this Vienna pool/gym proposal.
c. This and that, to finish up.
c1: Memberships or members?
I still can’t quite reconcile their membership counts with … well, anything, really. For a while, I was convinced that I’d made a mistake in assuming that their numbers were memberships (contracts), not members (e.g., a four-person family is four “members”). But if I confused that, I had plenty of help, because I still see something that looks like 10% of the persons in Vienna, listed as part of a projection of total Vienna memberships.
I can only guess that the way I think of it is that memberships — that is, contracts to pay for annual access to the facility, where (e.g.) the family membership rates are shown on the slide — is somehow being used interchangeably with members — that is, total persons, so that one paid membership for a family of four might be counted as four “members”.
Beats me. I never could make sense out of those physical counts, and still can’t. Vienna Aquatic Club has 450 family memberships, for a pool that’s larger than the proposed Vienna pool, which seems to show 2,450 memberships, in this mid-range projection. Somewhere between those two things, something does not compute.
c2. Uses as much electricity as 76 houses.
I know that these indoor pool facilities are energy hogs, but this slide was the first time I was able to quantify it. If they pay a typical industrial rate of around 10 cents per KWH (Virginia), this implies 1.21 gigawatt*-hours of power consumed per year. Google’s AI assumes me that the average Virginia household uses 17,000 KWH of power per year. So this facility will use as much electricity as 76 average Virginia households.
* You are required to use the Doc Brown pronunciation, or, at least, hear it in your head, because, seriously, when’s the last time you heard anybody else say gigawatts? The actual calculated answer is 1.3, but that begged to be rounded down 1.21. If you’re not a Back to the Future fan, skip it.
In hindsight, that sounds way more precise than it is. Three-quarters of a hundred typical Virginia households, or thereabouts. Or something. The presence or absence of natural gas heat muddies the situation a lot, for starters.
Continuing in that vein, suppose we plastered solar panels on the roof. We couldn’t even come close break-even, electrically. The National Renewable Energy Labs PVWATTS calculator says I’d need roughly a 1000 KW DC system, which Google’s AI tells me equates to about 72,000 square feet of space covered by solar panels. Something like one-and-two-third acres of solar panels would be needed, in this climate, to generate that much electricity over the course of a year. Or maybe four times the total roof surface of the building.
For me, driving a Chevy Bolt, and living about a five-mile round trip from the Oakmont REC Center, that 1.3 gigawatt-hours provides enough electricity for more than 1 million round trips per year, to Oakmont REC Center and back. That’s enough for 3000 people to make that round trip every day, for the year.
And so on and so forth. Lots.
Seems to me that, in large part, you run a great big boiler. Pool gotta be warm. Air gotta be warm. Pool is set in cold, cold ground. Above, big glass walls are de rigeur. Moisture gotta be removed from air. And pump-the-water. Lots of hot and cold going on, lots of area for heat gain and loss, plus moving a lot of water around not merely by pumping it, but by latent heat of evaporation. That’s going to cost, energy-wise.
I know that environmentalism is out, with this last election. But it still takes a crapload of electricity to run one of these. The 1.3 gigawatt-hours will generate about 420 tons of C02 annually, based on about 0.65 pounds C02 per KWH at Virginia’s current generating mix.
A difference from the past, that hits my ear, is that environmental impact doesn’t get so much as a nod or a whisper, in today’s discussion. Just notable to me, via its complete absence.
The construction is guaranteed to conform with national norms (LEED certified). All that means is that this building will be no more of an energy hog than others of its kind.
C.3 The Town retains an incomplete record of the rationale for the 2014 “No” decision.
As noted earlier in this series of posts, I stumbled across detailed reporting on the 2014 Town Council “no” decision on a pool, thanks to reporting by Brian Trompeter that was still on-line.
I finally went back to extract the official record, from the Town of Vienna website. Armed with the date (via Trompeter’s reporting), I tracked it down to the Town Council Work Session following the Town Council meeting occurring on 1/6/2014.
All that remains of that late-night work session is the official minutes. No video or other recording was made, or, at least, survives. (I do not think it was standard practice to record work sessions at that time.)
Those official minutes (available as a .pdf from this link) mention nothing of the key economies-of-scale argument. Based on the official minutes, the pool was simply too big an expenditure, and a needless complication of the community center expansion. The only place where the key “inefficient scale” (Kelleher) and “competition” (Polychrones) rationales were recorded was local journalism.
So, plausibly, Town Staff could not have known about what the “no” vote was about, or Kelleher’s critical “economies of scale” comment. The only record of that 1/6/2014 work session, available on-line, from the Town, makes absolutely no mention of it. It just says the pool cost too much, end of story.
Conclusion: It’s a judgment call.
As long as Town Council members are accurately informed as to costs, it’s their judgment call as to whether this proposed pool/gym provides good value to the citizens of Vienna.
With this latest iteration, I’d say that they are now adequately informed of what sort of financial commitment they are likely to be making.
As of this Monday, it’s in their hands.
