Category: Town of Vienna, VA

Post 2063: Vienna’s “Annex” survey, analysis of verbatim survey responses.

 

This is my analysis of the open-ended question 7, shown above, on the spring 2024 Town of Vienna survey regarding the future of “The Annex”.  That’s the name Town staff gave to the former Faith Baptist Church on Center Street, and then to the three-acre property on which that now-razed church once sat.

The short answers are that:

  • About 25 percent of survey respondents mentioned “pool” in that response.
  • Support for an indoor pool was about twice that for an outdoor pool.
  • Respondents were highly concentrated in the area closest to “The Annex”.
  • Respondents who asked for “indoor pool” were even more highly concentrated in the area closest to “The Annex”.

My main goal was to use these survey responses to judge likely revenues from the proposed Vienna pool/gym.  A rough cut of the resulting finances for the Vienna proposal, based on that, suggests annual operating losses around $1.4M.

I’ll be as transparent as I can about the methods I used to arrive at that last conclusion, in the final section below.  But it boils down to using the survey responses to guesstimate the number of Vienna families that might pay $1000/year for membership in this facility.

Part 1:  Survey responses and response rate by distance from “The Annex”.

For background, see the Town’s contractor’s analysis posted for the 9/30/2024 Vienna Town Council work session (link to .pdf.).   The survey was the last of three Town-run exercises to gauge public sentiment regarding uses of the former Faith Baptist Church property.

The survey was open for the month of April 2024.  The survey contractor’s final report was released just a few days ago, in response to a FOIA request.  The final version contains 1209 responses, of which 932 provided some answer to the free-form Question 7 shown at the top of the post.

I converted the multi-hundred-page table of responses, from the .pdf appendix of that report, to an Excel (.xlsx) file, which you may access directly by clicking the image below, which will take you to the spreadsheet on Google Documents.

The Town got 1209 usable survey responses, of which 61% were from individuals who self-reported as Town of Vienna residents (below):

I’d guess that the actual proportion of respondents who were Town residents was modestly higher, because many of those who left the “Town resident” question blank reported living in ZIP code 22180 or being within a short distance of “The Annex”.

As with any survey data, you have to keep in mind that people leave some answers blank, and the rest is self-reported data, and so may be subject to error (e.g., for whether or not you live within a mile of “The Annex”).  In most of the remaining tables below, I simplify the table by omitting a separately line for “missing” or “blank” or “unknown”.

The Town received some criticism for including non-residents in the survey, but there’s no one obviously right choice regarding that.  On the one hand, those outside the Town boundary don’t pay Town taxes.  On the other hand, they are potential paying customers for the proposed facility.   It was entirely reasonable to include those individuals if the goal was to identify the paying customers for an eventual pool/gym facility on the site of “The Annex”.

The Town asked respondents to indicate how far they live from the site of “The Annex”.  Fully 97% of respondents answer that question, so (accepting their responses as accurate), that provides a very good geographic “handle” on the responding population.

Bullseye shortcut for per-capita estimates.  Those distances – 1/4 mile, 1/2 mile, and 1 mile — were self-reported on the Town’s survey.  I use those to provide approximate per-capita estimates, based on the assumption that population density is reasonably uniform across the bullseye segments.  That is, I can substitute simple geometry (the areas of those concentric circles) as a reasonable proxy for relative size of the populations living in each area.

The response rate — fraction of Town population that responded to the survey — was vastly higher in the “inner bullseye” above, the area within a quarter-mile of the side of “The Annex”.  If you accept my “bullseye” approximation to the size of the population in each slice of the “bullseye” above, then for the three segments that have a boundary (>1 mile has no external boundary), you find that the survey response rate from those living 1/2 to 1 mile from the site is only 20% of the survey response rate from those living within 1/4 mile of the site.

You have to take that with a small grain of salt, as this is based on survey respondents’ self-reported distance, and it’s not even clear what, exactly, they based their response on.  (By car?  Straight-line?)  But the difference in response rate is so large that the potential error in the self-reported distance measure doesn’t negate this finding. 

One-mile ring as proxy for “Town of Vienna”.  Finally, below, I end up using the one-mile radius around the site of the proposed Town pool/gym as a rough-but-convenient approximation for “Town of Vienna.  That distance corresponds roughly — but only roughly to the Town boundary.  It omits the areas south of Tapawingo, and north of Westwood Country Club.  It extends slightly beyond the Town boundary to the west.  But that’s the point at which the bulk of the survey responses transition from self-reported Town of Vienna residents, to mostly non-residents:

When get to Part 3, the financial analysis, I’ll show the other reasons I have for ignoring the responses from beyond one mile, and simply inflating the remaining responses up to match the 5,400 families in the Town of Vienna.

Part 2:  Analysis of survey question 7 to split “pool” into indoor and outdoor.

Click the picture below to go to Google Sheets spreadsheet that allows you to count question 7 responses that contain the specific word or phrase of interest to you.

My first task is to find all the responses to question 7 that said “pool”, and split them into those who wanted “indoor pool” versus those who wanted “outdoor pool”.  This, because as I have noted throughout these posts, indoor pools are quite different from outdoor pools.  Separately, I need to toss all who said “free pool”, because that’s not an option, and those who said “no pool”.

There was a second open-ended question (question 8 on the survey), but only about 300 people provided any answer to that, and mostly, they repeated what they said in question 7.  It would be a slight — but only slight — refinement to include the information from question 8 to supplement what was said in question 7.

A crude word-search of the responses shows that, of the 28% that said pool, most didn’t specify what kind of pool they wanted.  So that, when I get to the financial analysis section below, I have to pro-rate those non-specific responses into “indoor” and “outdoor”.  That said (see next point), the lines in yellow are a pretty good guide to the fractions that specifically wanted an indoor pool or an outdoor pool (or in some cases, either.)

(Corrected — I swapped indoor and outdoor labels in the original, incorrect version.  There were twice as many responses suggesting indoor pool, as there were suggesting outdoor pool).

 

The upshot is that a) a lot of people said “pool”, and of those who were specific about it, b) indoor pool got about twice as many mentions as outdoor pool.

So I stand corrected, in my previous guess (from the previously published word cloud) that it was more like 50/50, instead of two-thirds/one-third indoor versus outdoor.

Crude word search is useful, but the only way to assign those responses well is to read every response, and provide some judgment as to what the individual was probably asking for.  For example, “exercise pool” is probably synonymous with “indoor pool”.  By contrast, somebody who wanted access to the local private membership pools was clearly interested in an “outdoor pool”.

For the moment, trust my judgment on correctly flagging Question 7 verbatim responses that said “indoor pool” versus those that said “outdoor pool”.  If nothing else, it was a labor-intensive task unlikely to be repeated.  (A.k.a., you’re welcome to do it yourself and see how the results change.)  And my results are contained in the spreadsheet link at the start of this section.

If you allow me to assign them, then you get the following detailed table and graph.

 

The first punchline is that 25% of survey respondents legitimately mentioned pool in their responses, and it wasn’t to ask for a free pool.  But we already knew that “pool” was mentioned frequently, from the word cloud that accompanied the reporting of the survey results by the Town.

And, as the crude word search suggested, of “pool”, where identifiable, indoor beats outdoor 2-to-1.  That, for the minority of answers for which I can infer their preference for one type of pool or the other.

But “can’t tell” beats them both, by a long margin.  Lot of people just said “pool”, or variations thereof.

Memo:  Two interesting indoor versus outdoor sidelights.

There were two interesting sidelights to my split of respondents into clear “indoor” versus “outdoor” pool requests.

First, “outdoor pool” was preferred by respondents of an age suggesting they were likely parents with young kids.  In hindsight, that’s no surprise, but was some validation that I managed to classify the responses correctly.

By contrast, “Indoor pool” was the preference for older adults, which I interpret as an interest in exercise swimming.

I think this provides some justification for what I’ve said throughout this series of posts.  Outdoor pools are for fun.  Indoor pools tend to be for exercise.  And, for sure, the association between age and indoor pool preference matches what I see weekly when I look at the Oakmont REC Center pool.  As of mid-morning weekdays, the pool is typically full of lap-swimming adults, with considerable gray hair evident.

But there was also an extremely strong association between “indoor pool” and nearness to the facility.  By contrast, respondents interested in an outdoor pool were not clustered near the proposed Annex site.

I’m still pondering this result.

In theory, this means I need to adjust the data for non-response bias.  That is, because the respondents were clustered near to the proposed facility, and those respondents had the highest likelihood of wanting an indoor pool, I ought to make some adjustment to make the survey representative of Vienna as a whole.  But — see final section — just by chance, for the market (revenue) analysis below, this ends up being a wash.  The very low likelihood of wanting in indoor pool by those living beyond 1 mile (and so, by most non-Town respondents) just about exactly offsets the strong desire for an indoor pool, for those leaving near the facility.  In other words, roughly speaking, the simple average of the survey responses, as they stand, is a reasonable approximation for my “Town of Vienna” financial analysis below.

So I’m not going to mess around with trying to adjust for survey non-response bias.  And I’m not even sure I should, because I’d bet that willingness to respond to the survey is some proxy for likelihood of using the facility when built.  In other words, the survey, as-is, might be a better representation of likely pool customers, than if I re-weighted it to show what I would have gotten if the survey response rate had been the same across all segments of the “bullseye”.

I can speculate that exercise swimmers presumably swim routinely and so especially value short travel time to a pool.  I can also speculate that the folks living near this facility don’t want the nuisance of an outdoor pool (which is, I assure you, a loud place in the summertime.)  I can speculate that those nearest the facility had higher exposure to the Town’s in-person events, where “indoor pool” was the only pool option offered.  The truth is that I have no clue what the right explanation is.  The observed fact is that people who lived nearest “The Annex” had a much greater likelihood of specifically requesting an indoor pool.

Part 3:  Going from “pool” to estimates of memberships and revenue.

In outline, I’m going to do the following.

  • Pro-rate the responses of “pool” into indoor and outdoor, to arrive at 18% of respondents who are OK with an indoor pool at “The Annex”.
  • Explain why I focus solely on households in the Town of Vienna as the likely customer base for this pool.
  • Take 18% of the 5,400 households in the Town of Vienna, then reduce that for:
    • Non-response bias:  That those who don’t care about “The Annex” (and are unlikely to use it) likely didn’t bother to answer the survey in the first place.
    • Intent-to-purchase bias.  (That only a fraction of those who said they’d like to see a pool will actually buy a $1000/year membership).
    • Admittedly, my estimates for both of those are no more than plausible guesses.
  • Count the resulting families at $1000/year, inflate for memberships as a projected fraction of operating revenues, and see how that compares to the projected operating cost for the facility.

I would not take any results here as a firm estimate of anything.  And yet, I think that they provide a common-sense indication that the Town’s small rec-center-like facility will likely run a large annual operating deficit.

How large?  Best guess, $1.4M, annually.

Details follow.

Part 3.1:  Pro-rate all “pool” responses to get “indoor pool”

Starting from the very large table shown above, I estimate that you could reasonably guess that 18% of all survey respondents were in favor of (or were OK with) an indoor pool on the site of “The Annex”.

Part 3.2:  The unsolvable problem of  “25% upcharge” and other reasons to focus solely on the Town of Vienna.

The Town’s proposal for a small REC-Center-like facility blithely notes that we intend to charge 25% more to non-residents of the Town of Vienna.  In prior posts, I’ve said “you can try”.

Here, I explain in detail why this is a problem for the Town of Vienna pool that has no good answer.  There is, as far as I can tell, no good way to be fair to Vienna taxpayers, and avoid losing the out-of-Town market to the nearby Fairfax County REC Centers.

The first consideration is taxpayer equity.  Put aside that the meals tax is slated to pay for construction.  Vienna taxpayers will be subsidizing a significant part of the operating costs of this facility.  People outside of Vienna aren’t paying the ongoing taxpayer subsidy required to keep this open.

Practically speaking, you must charge non-residents more, simply out of fairness to your own citizens.  (And note that, the higher the level of subsidy required, the more the “up charge” ought to be.)  If you project that around one-fifth of the cost of running this will come directly from TOV taxpayers, then the fair upcharge for non-residents would be (20%/80% = ) 25%.

The second, opposing consideration is the presence of nearby competition from the Fairfax County REC Center system.  The Town is already proposing to charge TOV residents roughly as much as Fairfax County charges for use of any of the three nearby REC Centers.

Practically speaking, you can’t charge non-residents more, beyond the Fairfax County REC Center rate, or your market for non-Town users melts away, beginning with the sizeable fraction of those individuals who actually live closer to a REC Center than to “The Annex”.  Below, I’ve crudely drawn in lines denoting the “halfway between” point.

But in addition, if you note that both the overall survey response rate, and the fraction of respondents asking for indoor pool, both rapidly decline as a function of distance from the facility (before any consideration of an up-charge beyond the Town border), then you realize that any remaining market area beyond the Town of Vienna border probably doesn’t much matter anyway.

There is little in this survey to suggest that people at a distance would be drawn to this proposed indoor pool.  There was rapidly dwindling interest with distance.  Interest at all (survey response), and on top of that, interest in a pool as fraction of responses.

Numerically, of the population living half a mile or more from “The Annex”, a low fraction bothered to respond to the survey at all.  And of those, once you get to a mile or more from the annex, the fraction of respondents who wanted an indoor pool at the annex is lower (than within the one-mile boundary) and plausibly would continue to decline with further distance.

The upshot of all this is that I don’t think I’d make a huge error by concentrating solely on projecting customers for the proposed Vienna pool/gym solely from the 5,400 households in the Town of Vienna proper. 

At this point, you may ask, what about those who said they wanted a gym, not a pool.  Some responses did say “gym” but not “pool”, but those were relatively few, and would not materially affect the conclusions below.

By contrast, the Town’s proposal projects that half the income from this facility will come from persons living outside of the Town.  But they did not acknowledge the presence of the three nearby REC Centers, the dilemma regarding the 25% up-charge, nor were those consultants aware of the rapidly declining survey response rate, and “indoor pool” response percentage, among survey respondents, based on distance from the proposed facility.

In other words, I think the business plan from the Town’s consultants was wildly optimistic in projecting that half the user-fee money would come from non-residents.  By contrast, I may be somewhat pessimistic in ignoring the area outside the town entirely.  But I don’t think I’m materially understating revenues in doing so.

In fairness, note that the response rate decline may not be entirely cleanly measured in the third ring of the bullseye, as that extends a bit beyond the Vienna town boundary.  Not clear if all of those people were systematically surveyed, and was too lazy to check, because for sure, almost all the area of the third ring of the bullseye is, in fact, Town of Vienna land.  So the resulting response rate has to be almost right, if “right” means restricted to the portion of the 3rd ring for which a systematic survey was conducted.

Anyway, let me point to the 25% upcharge, wave my hands, and ignore the possibility of selling a large number of pool memberships outside the Town of Vienna.

A lot of things about the apparent sharp decline in interest in an indoor pool, with distance from the indoor pool, bother me.  Starting with, maybe the self-reported distance measure is way off, and everybody grossly understates their true distance from “The Annex”.  And then, this apparent sharp dropoff of pool demand, with distance, runs completely contrary to my observation that the pool at Oakmont is always well-used by lap swimmers whenever I see it.  So I know that dedicated exercise swimmers are willing to travel quite a ways to get to that pool.  Why, then, such a sharp decline with distance in the Vienna survey data?  Maybe pools surrounded by housing do get a considerable walk-in trade, on top of the widely-scattered regular exercise swimmers.  On the other hand, maybe a lot of the “yes” votes for a pool, from those near “The Annex”, aren’t the sort of serious indoor swimming fans who will buy an annual membership.  Bottom line is that something about this doesn’t quite square up, and I have yet to pin down what it is.  And likely never will.

The contractor’s analysis said to double your Vienna money, to account for business from outside of Town proper.  By contrast, I’m saying zero money from outside of Town.  I think I’m less wrong than they are.  But that’s about as much as I can claim, until such time as the thing is built, the prices are charged, and the patrons do or do not appear from beyond the Town boundary, upcharge dollars in hand.

 

3.3:  Project the financials starting from 18% of 5,400 Town of Vienna households,

If I had to guess, I’d guess a $1.4M annual operating loss.  That’s what I project by assuming that 18% of the entire Town of Vienna population would like to see a pool at “The Annex”, but only half of them actually buy a membership.*  And that revenues from outside the Town are small enough to ignore, as a result of declining interest with increased distance, and the anti-competitive impact of a “25% upcharge” policy when we have three Fairfax REC Centers nearby.

* Where does 50% come from?  Google’s AI tells me that value can occur, when people literally say that they intend to purchase a particular item on a survey.  So that seemed like a conservative (small) reduction to take, here.  Plus, we all trust AI to tell us the truth, right?  The impact of potential non-response bias, by contrast, is just a plausible round number.  There is no empirical basis for it whatsoever, in this case.

Another thing in favor of that middle scenario is that the apparent density of memberships per square foot of pool is plausible.  Under the middle scenario, the 5500-square-foot pool has 483 paid annual memberships.  That’s only modestly higher density of family contracts per square foot than occurs at our nearby private membership pools (as detailed in prior posts on this topic).

Conclusion.

I was wrong about demand for an outdoor pool.  The primary demand for a pool at “The Annex” comes from an older population, one that I interpret as being more interested in routine exercise than in “fun for the kids”.  Those people clearly want a year-round pool, and they dominate the “pool” responses to the open-ended survey question 7.

That said, I don’t think this survey provides any comfort at all to those who think that the resulting operating losses will be small.  Certainly not, if we focus on the 5400 households in the Town of Vienna, and make any reasonable projection of likely annual memberships sold within that population.

Further, the survey results show that interest in what the Town is proposing for “The Annex” declines rapidly with distance, and that on top of that, interest in an indoor pool, among survey respondents, also declines rapidly.  Couple that with an almost-certain need to have a big up-charge for non-residents (out of fairness to Vienna taxpayers), and the presence of three nearby Fairfax County REC Centers, and I think it’s hard to justify assuming large amounts of revenue from beyond the Town’s borders.

So, once again, no matter what data source I start from, I still characterize the Town’s decision to build a one-third-scale knock-off of a REC Center as akin to a mom-and-pop retailer deciding to locate next to Walmart.  You’re going to take an economic beating for doing that.  The only uncertainty is how large a beating you’re going to take.

That doesn’t mean you shouldn’t do it.  It just means that as Town Council evaluates the cost-benefit tradeoff for this current proposal, they need to understand that the operating losses — the “forever” taxpayer subsidy needed to keep the doors open — is likely to be a lot more than the few-hundred-thousand that they have been shown.

Addendum:  But wait, didn’t the Town already show us that we wanted an indoor pool?  And pickleball.  Lots of pickleball.

Nope.  It might look that way, from the consultant’s report on all this, but you have to track exactly which graphic came from which exercise that the Town conducted.

From the consultant’s report on potential uses for “The Annex”, cited above:

Source:  Town of Vienna, Kimley-Horn report, posted with the 9/30/2024 Town Council work sesssion.

I I I missed that, the first few times I skimmed that report, and I can only assume that others did as well.  That first Town graphic in this section came from an in-person event, with perhaps 60 persons attending, where “indoor pool” was the only option listed.  And was, also, the first option listed.

Post 2062: Vienna Pool/Gym Proposal: Fairfax REC Centers require no taxpayer subsidy for operating costs.

 

Source:  Oakmont REC Center, posted right next to the elevator.

Let me start with the simple fact, as shown in the picture above.  Fairfax REC Centers are self-supporting.  They require no ongoing taxpayer subsidy.

The proposal for Vienna’s one-third-scale REC Center, by contrast, assumed that operating cost subsidies would be required.  It seemed to imply that this was normal, and that nothing could be done about it.  That, consistent with ignoring the nearby REC Centers.

You may or may not be familiar with one or more of the three Vienna-area REC Centers.  This post has a broader focus than any one REC Center.

Focus 1:  Do you need any more proof of economies of scale?

With the REC Centers, the lack of ongoing tax support is a bedrock principle.  User fees cover operating costs.

But the need for permanent taxpayer subsidy as assumed in the Vienna pool/gym proposal.  This, despite proposed user fees that are roughly the same as what Fairfax charges ($960 annual family membership for Vienna, versus $1050 for Fairfax.)

A moment’s thought will tell you that if the Vienna proposal could have claimed no need to subsidy, it would have.  That would surely have made it an easier “sell” all around.

Why can Fairfax count on the REC Centers to be self-sufficient, but Vienna can’t.  Compare:

  • Vienna’s proposed facility, 25,000 square feet.
  • Lee District REC Center ….. 86,000 square feet (reference).
  • Cub Run REC Center ………, 94,000 square feet (reference).
  • Audrey Moore REC Center, 83,000 square feet (reference).

The smallest REC Center for which I have found size data — Providence — is roughly twice the size of the planned Vienna facility.

As a Vienna resident, you may have been aware that there are three REC Centers nearby (Oakmont, Spring Hill, Providence).  You may have been vaguely aware that these are large facilities.

But you may not have been aware of the full context.  All of the Fairfax County REC Centers are large.  And they pay their own way with user fees.  But Vienna’s proposed facility is small.  And not even the people who’d like to sell us the plans for the building can credibly claim that it’s going to be self-supporting.

Connect the dots between that, and the relative size of the facilities, and 2014 Town Council Member Kelleher’s point regarding the inefficient scale of a Vienna facility.

Focus 2:  A purposeful level of subsidy in the well-planned Fairfax County system

The second big difference between the planned Fairfax County system, and the one-off proposed Vienna facility, is that the lack of operating subsidy for the REC Centers is part of a larger recreational whole.  Fairfax didn’t randomly set out to make the REC Centers self-supporting.  That’s how REC Centers fit into the bigger picture, in Fairfax.

Fairfax REC Centers are just one point on a fairly intuitive “spectrum” of taxpayer subsidies, for a variety of recreational activities.  For Fairfax County-run entities:

  • Golf courses cover operating cost, plus.
  • REC Centers cover operating cost.
  • Events held in the parks cover operating cost, minus.
  • Parks (just parks, not “attractions”), are free.  They cover none of their costs.

At one end of the spectrum, expensive recreation, typically used by the well-off (golf), must pay its own way for both operating and capital expenses.  At the other end, taking a walk in a pleasant un-developed space has no associated user fee.

This purposeful spectrum of taxpayer subsidies in Fairfax is laid out in their recent study on equitable access to recreational activities in Fairfax.Fairfax County recently underwent some self-criticism for being too business-like in terms of limiting subsidies, and making many facilities inaccessible to the poor (I paraphrase, but that’s the common-sense gist of it the 2024 Fairfax equity study).

By contrast to Fairfax’s seemingly-thoughtful planning of subsidy level by type of activity, Vienna’s taxpayer subsidy level for the proposed pool/gym is … whatever it is.  It’s purely the residual of finances of this particular facility, no matter how they work out.

On the one hand, Fairfax County is the 600 pound gorilla in this market, and they have leeway that Vienna does not.  So in that sense, it’s unfair to point out the “randomness” of Vienna’s taxpayer subsidy for it’s (small-scale) rec center.

And yet, the more I look at the entire Fairfax system, they have made an effort to make it sensible, for want of a better term,  So, on the other hand, it’s undeniable that much of the Fairfax system has an innate logic to it, while Vienna’s does not.  Nobody even seems to be asking the question “what is the right, fair, just, or reasonable level of subsidy” so that Vienna can have a public indoor pool.

But on the other hand, “What’s the right subsidy for this proposed facility?” is not even on our radar screen.

Post #2061: Vienna pool/gym: Why we can’t just pre-sell memberships to test demand for this new facility.

 

Regarding the proposed Vienna pool/gym, why not ask people to buy a membership in advance, so we can get an accurate gauge of paying demand for this facility?  It’s not as if that’s a novel idea.

I’ve asked myself that, and I’ve heard others asking the same question.

The short answer is, Vienna can’t, because we’re broke.  Roughly speaking, all the money available for the Vienna capital fund is already spoken for, thanks mainly to the our very large 2020 bond issue.

So, even if we raise taxes now, assuming normal economic times ahead, we’d have to save the revenues for four years, first, just to be able to be able issue that new bond with the assurance that we have enough money around to make the payments on it.

The upshot is that if we wanted to have a “membership drive” to test the waters, before making a final decision on this facility, we’d be selling memberships in a pool that won’t open for another six years.

Judging demand by offering pre-orders is a standard way of doing business.  It would be particularly helpful here, because demand for the facility is the big unknown.    But, practically speaking, we can’t do it, because we’re basically broke, in terms of our capital budget.

Extras for experts:  What happens if we don’t have normal economic times for the next four years?

Source: Some old Town of Vienna budget.  For some reason, the Town has taken all of its archive of budget documents off-line, so I can no longer go back and give an accurate citation as to source.  I first posted this chart in Post #547.  

The year 2008 saw our last significant economic downturn, a consequence of the collapse of the housing bubble, and the near-collapse of the banking system.  (There was a short, sharp recession during COVID, but thanks to the magic of every government in the civilized world showering money on their populations, that was over with in half a year.  Followed, with some lag, by a world-wide burst of inflation.  But no Great Depression.  I count that as a win.  So the short-but-sharp COVID turnaround doesn’t count as a “real” recession, in my book.)

While Vienna property values were stable during the 2008-2010 recession, meals tax revenue was not.  People ate out a lot less.  I guess.  And that resulted in the dip in Vienna’s meals tax revenue, circa 2008, shown above.  Oddly, it took close to a decade for the meals tax revenues to return to their 2008 level.  Why was that revenue number sticky?  No idea.

That meals tax money is how Vienna makes the payments on the bonds we have issued a.k.a. money we have borrowed.

With all the loose talk about mass firings of Federal employees, blanket tariffs on imports, plus the end of any COVID- or infrastucture-related stimulus money, I’d guess that some chance of a 2008-style dip in meals tax revenues will factor into Town Council’s final decision on this issue.  I heard a citizen voice that concern specifically with respect to our being part of the DC-area economy, at the mid-October Town Council hearing.

The upshot is that there’s a cost to maxing out your credit card.  You can’t make a major new purchase in a hurry.  And, all other things equal, I’d think your level of fiscal risk-aversion should increase, going forward.  And our meals tax revenue is known to fall in hard economic times, per 2008 above.  (And, somewhat oddly, stay down.)

This whole Vienna pool thing is a fraught decision.

Post #2059: Town of Vienna, Accessory Living Units FAQ, from the 11/13/2024 Planning Commission Meeting.

Prepare to bow before our machine overlords

In case you’ve never heard of an Accessory Living Unit (ALU), it’s what I’d have termed a mother-in-law suite.  It’s a piece of your house that’s been made into its own dwelling unit.  Meaning, at a minimum, having its own bathroom and kitchen.

But does it need to have its own external entrance?

I don’t know, give me a second, let me ask the AI.  It says:

Outside Entrances for ALUs: Not Required, but Regulated

So there you go.  Below, in blue, is Google’s NotebookLM AI summary of the 11/13/2024 meeting of the Town of Vienna Planning Commission discussion of accessory dwelling units within the Town of Vienna (reference).

AI will sometimes make profound mistakes, so don’t assume this is 100% accurate. But, a) this is a good use case for it, owing to much of the material being dry-as-dust (it’s a zoning ordinance change, for crying out loud), and b) near as I can tell, this looks correct in all major respects.

I did this for the novelty of AI.  But I got what seems to be a perfectly satisfactory summary of that meeting.  With the realization that the AI was mostly parphrasing what the Town said it its official documents.  That said, that’s kind of what I’m looking for — just the bare facts.

If all you need is a fairly good summary of the issue, this will do.  At the cost of a few minutes’ time.  Skim it.   It’s worth the read for the content.  The AI novelty is just a bonus.

I’m going to lie down and be obsolete now.

Edit:  I have now replaced the original lengthy text with an AI-generated FAQ, in blue text, below.

 

Vienna, VA Zoning FAQ: Accessory Living Units (ALUs)

What are the proposed changes to Vienna’s zoning code regarding ALUs?

The Town of Vienna is considering amendments to Chapter 18 of its zoning code to permit the development of attached ALUs within single-family detached residential zones (RS-10, RS-12.5, and RS-16). An ALU is defined as a secondary residential unit that is structurally part of, connected to, and clearly subordinate to the primary single-family detached dwelling unit.

The proposed amendments include the following:

  • Size limitations: ALUs may not exceed 800 square feet or 40% of the primary dwelling’s floor area, whichever is smaller.
  • Parking Requirements: One off-street parking space would be required per ALU bedroom or sleeping quarter. The current driveway curb cut serving the primary dwelling must be utilized; no additional curb cuts are permitted.
  • Owner Occupancy: The property owner must reside in either the principal residence or the ALU.
  • Leasing Restrictions: A minimum lease term of 12 months would be required for ALUs. Short-term rentals (under 30 days) are prohibited.
  • Prohibition on Certain Uses: Family day homes would not be permitted to operate within an ALU.

What was the reasoning behind proposing these amendments?

The amendments were drafted in response to several factors, including:

  • A desire to increase housing diversity: The Town Council engaged in a series of work sessions focusing on housing diversity and exploring ways to expand housing options.
  • State Legislation: A state bill was introduced in 2024 that would have mandated localities to permit ADUs in single-family zones. While this bill did not pass, the Town Council is proactively considering options that align with the Town’s vision.
  • Community Support: A 2021 community survey indicated significant support for allowing ALUs in various configurations.

What are the potential benefits of allowing ALUs in Vienna?

  • Increased housing affordability: ALUs can provide more affordable housing options for individuals and families.
  • Additional housing choices: ALUs offer diverse housing arrangements for extended family members, aging parents, or individuals seeking smaller living spaces.
  • Potential to generate income: Homeowners can potentially generate rental income from ALUs.

Are there any concerns about allowing ALUs in Vienna?

Yes, some concerns have been raised:

  • Increased density: Some residents are concerned that allowing ALUs will increase density and strain existing infrastructure, such as schools and roads.
  • Impact on neighborhood character: There are concerns that ALUs may alter the character of established single-family neighborhoods.
  • Parking and traffic: The potential increase in vehicles and on-street parking due to ALUs is a concern.

Where can I find the full text of the proposed amendments?

The draft ALU Zoning Code Amendments are available as Attachment 1 to the November 13, 2024 Planning Commission Meeting Agenda, accessible on the Town of Vienna website.

How can I provide input on the proposed ALU amendments?

The Planning Commission held a public hearing on November 13, 2024, to gather community input. The Town Council is scheduled to hold its public hearing on the proposed amendments on November 18, 2024. Residents can attend these meetings to voice their opinions and concerns.

What happens after the public hearings?

After the public hearings, the Planning Commission will provide its recommendation to the Town Council. The Town Council will then consider the Planning Commission’s recommendation, public feedback, and other factors before voting on whether to adopt the proposed amendments.

When will these zoning amendments take effect?

If approved, the amendments are anticipated to become effective on January 1, 2025.

Post #2058: Vienna rec center proposal. Beyond Econ 101.

 

Why am I still writing about this?

The economics of it are weird enough to be interesting.  (I am an economist. Or, at least, was.)

Plus, I’m retired.

So, the rest of this, I’m doing for fun.  Or what passes for fun, in my life.

First, a moment for catharsis, or how did I get here?

I will briefly express my dismay, then anger, then amazement, then horror at the Town’s decision-making process.  This, by way of understanding my motivation.

Dismay at reading the projection of demand, revenue, and operating losses for the proposed Vienna pool/gym facility.  I benchmarked the key demand and revenue quantities against some seemingly common-sense standards, and I didn’t much like what I saw.  And I liked even less, why I thought I was seeing it.  FWIW.

Anger once I realized that this seemed part of a systematic campaign to make 2014 Town Council members Polychrones and Kelleher уничтожить, that is, made into nothingness, as if they had never existed.  Intentional or not, that’s a big failure in the decision-making process, and failure is failure.  Because, not understanding the likely operating cost implications of Kelleher’s economies-of-scale point, coupled with Polychrones’ local competition point — that’s not acceptable, if you want a good outcome all around.

Amazement when it dawned on me that — this is hard to say — maybe not every person on Town Council was necessarily aware that they, Town Council, were the buyers in this transaction, and that they were looking at the seller’s numbers, for the financial projections.  My wife tells me it’s rude to say that, but hey, I’m just reporting my thought processes.  And the fact that it took me a while to figure that out myself.  But the financials were done by a chosen partner of the folks trying to sell Vienna a couple-million worth of architectural services.

Did I say amazed?  Wrong nuance entirely.  Horrified, when that sank in.

As an interested bystander on the buyer’s side of the table, with some relevant professional experience, I was thinking, wow, for sure, our side of this was thoroughly prepped as to this bedrock aspect of what they’re being shown, right?

But … some of my more difficult times as a consultant arose because I’d just plow ahead, thinking the client and I were on the same page.  When that wasn’t so, and it would have saved a lot of heartache to straighten that out first.  So it’s not a waste of time, particularly given that this is likely a once-in-a-lifetime experience for everybody on my (the buyer’s) side of the table, to make sure everybody understands the basic framework.

Even if that means possibly looking like an ass by stating the obvious.  It comes with the job.

As subtlety is not my strong suit, nor is it effective in a situation like this, I worked to give the issue of operating losses higher visibility, make sure the Polychrones/Kelleher logic of the 2014 decision was understood, and so on.

That’s how I got to this point.

With that out of the way, let’s see if I can step it up to Econ 202.

The story so far, as I tell it.

By starting with 2014 Town Council member Kelleher’s warning on the inefficient scale of a Vienna facility, and layering on a stringent model of competition in this market (thou shalt not price above Fairfax user fees), I came up with sort of Econ 101 synopsis of the situation.  Here:

Taxpayers pay for scale inefficiency.  If a Vienna facility’s average cost per user is twice that of Fairfax’s REC Centers (Kelleher’s warning, quantified), then, all other things equal, taxpayers end up eating that excess cost due to inefficient scale of operation.  Like $1.1M a year, here.  Forever, because it’s baked into the inefficient scale of the facility.

The immediate policy implications.

Unless you still want to rely on the seller’s rosy scenario for projected taxpayer subsidy for this facility, a shift of thinking is in order.

Now, instead of having faith that your staff can run one of these every bit as well as Fairfax County runs the REC Centers,  …

… in order not to take an ongoing financial beating (50% operating losses), you must believe that …

… your staff must make up for the cost-side deficiency of a small-scale building …

… which means that your staff must significantly outdo Fairfax County, in bringing in revenue per square foot of facility.

And in my world, they can’t do that with price increases beyond what Fairfax charges, so …

… they have to do that by bringing in a higher volume of services/number of paying customers, (per facility square foot, relative to Fairfax.)

In other words, assuming Kelleher’s warning is right, and that the numbers as presented are ballpark, to avoid taking an economic beating year after year, you have to assume not just that your staff are as good at this as the Fairfax County staff, you have to assume that they’ve got some aces up their sleeve, and that your staff must outperform Fairfax REC Centers considerably, in terms of volume of paying customers served, per square foot of facility.

Maybe they can.  Maybe they can’t.  I don’t know.

But all of a sudden, once you realize the cost handicap Vienna faces, this is a lot bigger ask.  I’m not saying this hurdle cannot be overcome.  I’m just saying that Town Council needs to be aware of it.

Of luck or skill, either one will do.

On the one hand, there’s luck.  Maybe you could get much higher revenue per square foot merely because you’re lucky enough to be located in a particularly lush part of the surrounding gym-market landscape.

This, I think, is the essence of what the seller’s analysis of the situation was trying to say.  That there’s so much money in Vienna, and it’s looking to be spent on an indoor pool, and it’s going to be spent on your pool, that, no problem, if you merely run your facility with technical competence, your losses will be minimal.  So, despite any up-front handicap of high average costs due to small size, Vienna will come out of it whole, financially, or nearly, because the location of the facility allows you to skim the cream off this particular market location.

So, in my view, the seller’s analysis is at root a luck argument.  We just weren’t directly aware that we had to count on that kind of luck, because Kelleher’s scale economy warning had been buried.

So rephrase the received wisdom on this proposal as:  By being sufficiently lucky in its choice of location, Vienna can offset the innate handicap of high average costs due to inefficient scale, with high customer volumes per square foot of facility.

To which I say, maybe.  Maybe we’re lucky enough that simply our location offsets our cost disadvantage.  Moderately high population density, lot of disposable income, what’s not to like?

But while Vienna is the highest-income community in Virginia (per news report), it’s not like we’re exactly surrounded by slums.

The alternative to luck is skill.  That is, a business plan for the facility that specifically acknowledges the cost handicap, and realistically shows specific actions by Vienna that plausibly will overcome that, to avoid high levels of operating losses for this facility.

To the contrary, on the skill side — the business plan, if you will — I’ve now stumbled across three things that suggest that little thought has been given to ways to maximize revenue in this facility.

The first is dismissing any notion of binding capacity limits for the proposed Vienna pool.  The seller’s proposal explicitly – and kind of weirdly, come to think of it — makes a big deal about those not being binding.  No problem, everybody will fit.  But when you toss around projections of 4000 memberships — which, if they were all family memberships, would be like 12,000 people — for a building with 100 parking places and a pool with a maximum capacity of 130 people or so — eh, I’m just not seeing it.

Visit Vienna Aquatic Club on Memorial Day weekend, and you’ll likely agree with me.  That’s a bigger pool than is proposed for the Vienna facility, with just 450 memberships.  Note the full 100-car parking lot, and the crowded pool, realize that 4000 memberships for a smaller pool is asking a lot.

So, to me, it still looks like the financial proposal for this Vienna pool was tacked onto the physical proposal for the building, at the last minute (which I know to be true in essence, as it was an after-the-fact add-on), and that the apparently discrepancy between the financials and physicals of this overall presentation was never reconciled, merely papered over.

Surely, this facility has some finite capacity in terms of memberships that can be effectively served from a building of this size.  Somebody needs to state what that is and why, and otherwise prove that capacity limits don’t put the kibosh on the notion that we’ve simply lucked into a very rich vein of ready pool money, by having the good sense to put a pool in Vienna, and that’s all we need to know.

Second, “25% up-charge” needs to be, well, explained, at a minimum, as to how Vienna plans to implement charging 25% above the Fairfax annual membership rate (what they prose to charge to Vienna residents, roughly, per the proposal), for (effectively) a small clone of a Fairfax REC Center, in Fairfax’s back yard.  Because I’m not seeing it.

And now, news to me, I stumbled across what appears to be the Town locking out a potential source of pool revenue, with a Vienna pool design that appears ill-suited to accommodate swim teams.  This, when Fairfax thinks enough of swim team revenue for the Reston facility that, in its budget fund 40050 summary, it calls out three different swim-team-related organizations by name.  (Which I interpreted to be, in effect, thanking them for being good, paying partners in this endeavor.)

If nothing else, further progress calls for an eyes-open analysis of the average cost hurdle Kelleher warned about ten years ago, and what, if anything, Vienna is going to do to surmount that.

A Tetris-like exercise to help you see the problem.  The graphic above is the pool schedule at Oakmont REC Center, for some recent random day.  Except for “open swim”, the little colored (non-blue) blocks of time represent customers and revenue, from classes and swim team practices.  So that’s a graphic representation of how well Fairfax is doing now, in terms of “customers per square foot of pool”.  Now try to fit in twice as many of those blocks, in that same space.  That’s more-or-less what you’re asking Vienna to do, to come close to breaking even, in a facility that has twice the operating cost per square foot.  Worse, try it again, but this time expand the  “open swim” area to cover half the pool, as Vienna seems to be selling this as roughly half “fun” pool, have “exercise” pool.  Now try to fit in two copies of all those colored blocks, into half the pool.   That’s the flavor of what Vienna must do, to break even financially, if they really aren’t kidding about this being a half-and-half, fun/exercise pool.  It illustrates the ask you are making, by starting off with high costs due to an inefficient scale of operation.

Or, just have the taxpayers cover the proposed facility’s operating deficit, whatever it may be.

I guess this ended up being business 101, instead of econ 202.

Or maybe Tetris 101.

Free advice for what it’s worth.

Post #2057: Vienna pool, the fascinating history of Small Tax District #5.

 

With this series of posts, I’ve pushed the idea that the Town of Vienna needs an accurate assessment of costs and benefits of a proposed Vienna pool/gym complex.  Part of the costs — by my estimate, the majority of the costs — is in the ongoing taxpayer subsidy required to cover the operating losses of the facility.  Further, pretty much everything I look at tells me that the projected operating losses that the Town has been shown are materially too optimistic.

Based on what I stumbled across today, this is (maybe not) my last bit of unsolicited information and advice to the Town of Vienna, before they decide whether or not to build a pool/gym complex.

Think of the proposed new pool as “completing” the existing Vienna REC Center.  Combine the existing budget of the Vienna Community Center, with the projected budget of the newly proposed pool, arrive at the budget of the Vienna Community Center With Pool.  Then do a detailed comparison of that, to the existing Reston Community Center With Pool.

In round numbers, the taxpayer subsidy for the Reston Community Center with Pool amounts 21% (of Vienna’s total property tax rate).  The projected taxpayer subsidy to what I characterize as the Vienna Community Center with Pool amounts to 12% (of Vienna’s total general fund expenses).

That’s not apples-to-apples, but it’s in the ballpark, and that’s a big gap.  I think we’d all learn something useful if someone with access to the detailed data attempted to reconcile those two numbers, however crudely, before the Town commits to pool/gym complex.

The upshot is that when you finally get around to seeing the obvious — that this is the second recent attempt to add a pool to the community center (the last one being in 2014) — then the idea above starts to make some sense.

Ten minutes’ worth of reading material

Here are a few things I learned, from skimming the three documents above, all of which focus on Reston, a well-to-do community with about 62,000 residents, located about eight miles northwest of Vienna.

  • Fairfax County has a REC Center in 9 of the 10 county districts.
  • The only district that doesn’t have a REC Center is Hunter Mill.
    • (So, an obvious thing to do is ask Fairfax why that is.)
    • Vienna is at the southern tip of Hunter Mill.
      • And that explains why we’re surrounded by three REC Centers.
      • Those three REC Centers are in the three adjacent Fairfax County districts.
  • Decades ago, Reston got its own Community Center, as a substitute for a REC Center.
  • But Reston was required to pay for it.
  • The taxpayer subsidy for the Reston Community Center is literally the Fairfax Small District 5 tax.
  • The Fairfax Small District 5 tax is currently 4.7 cents per $100 of assessed valuation.
    • For comparison, the (entire) Town of Vienna property tax rate is 22.25 cents per $100.
    • That works out to 21% (4.7 cents/22.25 cents).
  • The Reston Community Center facilities include a pool about the size of the proposed Vienna pool.
  • And, separately, the Fairfax budget document specifically mentions that swim teams provide an important revenue source for the Reston Community Center  pool:

From the Fairfax County document, emphasis mine:

Swim team and other group rental reservations for RCC's Terry L. Smith Aquatics Center remain an important layer of programming and cost center revenue performance.  ... rental ability to community partners, including South Lakes High School, Reston Masters Swim Team and the Reston Swim Team Association winter swim program.

Two practical takeaways from ten minutes’ reading.

Swim teams matter, for revenues.  Enough that Fairfax highlights that in its budget documents.

And, separately, maybe the best way to get a grip on the likely financial impact of the proposed Vienna pool is with a detailed analysis of the Fairfax Small District 5 tax, as a fraction of Vienna’s property tax, compared to the Vienna Parks and Rec budget net cost, as a fraction of Vienna’s general fund costs.

In other words, think of a combined Vienna Community Center and Pool as being analogous to the existing Reston Community Center with Pool, and work up a financial comparison on that basis to provide an estimate of likely taxpayer subsidy for the proposed Vienna facility.

Details

First, if this new pool isn’t designed to accommodate swim teams, it seems likely that Vienna is losing out on a major revenue stream.  From the on-line grumbling I’ve read, the current Vienna pool design will not work for swim teams, or will not work adequately, or something.  (“Swim team” is a foreign culture to me, so all I can do is pass along the rumor.)  The Town needs to ask Fairfax for the data to pin down how much revenue loss that involves.

Second, the annual taxpayer subsidy for the Reston Community Center complex creates an add-on property tax rate (Small District 5 rate) that is 21% of Vienna’s total property tax rate.  

Now, that is a number, and its a big number, but in no sense is it a clean number, or a meaningful number, as it stands.  It’s not obviously and immediately an estimate of anything directly relevant to the current discussion of a Vienna municipal pool.

For reference, the Reston taxpayer subsidy for their Community Center (including the Smith Aquatic Center) amounts to 21% of Vienna’s entire property tax rate of 22.25 cents.  By contrast, the entire Town of Vienna Parks and Rec budget ($5.2M, TOV 2025 adopted budget, page 11), less Parks and Rec fees ($1.6M, TOV 2025 adopted budget, page 13) is $3.7M, which is in turn about 11% of the $33M spending from Vienna’s general fund (same, page 8).  And so, by contrast, the net taxpayer subsidy to run all of Vienna Parks and Rec currently amounts to around 11% of the general cost of Town of Vienna government.

The projected $0.3M ongoing taxpayer subsidy for the proposed Vienna gym/pool amounts to about 1% of Vienna general fund revenues.  So that, as projected, the Vienna Parks and Rec budget, net of all revenues, will expand to a total taxpayer subsidy that is 12% of Vienna general fund costs.

On the one hand, we have the Reston Community Center With Pool.  On the other hand, think of adding a pool, to our existing Town-run recreation facilities, as creating the Vienna Community Center With Pool.

  • The property tax rate that pays for the operation of the entire Reston Community Center with Pool is 21% of the size of Vienna’s total property tax rate.
  • If you view this new proposal as the Vienna Community Center with pool, it is projected to require tax subsidy of about 12% of Vienna general fund costs, crudely put, as explained above.

Somebody needs to reconcile these superficially-irreconcilable numbers.

Conclusion

I get the strong sense that Vienna is not planning realistically for the operating losses (required taxpayer subsidy) for this new pool/gym complex.

This latest realization about the Fairfax Small District 5 tax adds to my unease.  That nine-percentage-point gap between the Reston taxpayer subsidy and the projected Vienna taxpayer subsidy (for a combined Community Center and Pool) really begs for a detailed reconciliation.  If I had unlimited access to the books of both organizations, I believe I’d dive into that, first.

Forever is a long time, and that’s approximately the length of the commitment that Vienna is making to the required annual taxpayer subsidy for the new facility.  It doesn’t seem too much to ask that somebody reconcile the experience of the nearby Reston Community Center with Pool, with the projected set of books for a combined Vienna Community Center with Pool.

 

Post #2056: Vienna pool, tearing down my own estimate.

 

This post is some musings on how I’d go about attacking my estimate that the Town should plan for 50% operating losses in a Vienna gym/pool facility.

How to attack this 50% loss estimate

In a previous post, I made the case that the proposed Town of Vienna pool/gym would likely have an operating loss of around 50%.

It’s not a bad argument.

  1.  The cost side — operating cost per square foot of facility — is nailed down reasonably well, as these things go.  Based on the data we have on hand, the proposed Vienna facility would have 33% of the size, but 71% of the cost, of the typical REC Center.  Most people can fill in the rest.  I would, of course, revise that estimate if more compelling data came forward.
  2. This issue of higher cost, due to smaller scale of operations, had a good “provenance”.  This “economies of scale” problem for a Vienna facility was first raised by Council Member Kelleher, in the 2014 Town Council “no” vote on a pool at the Community Center.
  3. The results of my simple Econ 101 analysis “sounded reasonable”, at least to an economist.  Price competition from the Fairfax REC Centers means that all the  inefficiency due to the small size of the Vienna facility has to be borne by the taxpayers.  Restated, all other things equal, if the taxpayers build themselves a “boutique” fitness facility, they’re going to have to pay for the the portion of operating average cost (per member, say) that is attributable to the smaller scale of operation.
  4. And, plausibly but far from proven, significant economies of scale is the very reason we have nine really big REC Centers for a county of 1.2M population.  To me, the sheer size of the typical REC Center suggests that Fairfax was aware of the economies of scale issue when they built them.  Fairfax was tasked with making them self-supporting.  (For the REC Centers, user fees fully pay for operating costs.)  I’m guessing that building them big, few, and widely-spaced was a conscious strategy.

But on the demand side — which I can summarize as revenues per square foot of building — I assumed that Vienna could not do materially better than Fairfax.

So, to say that my rule-of-thumb for likely taxpayer losses is way off the mark, you need some sound data and reasoning to suggest that Vienna’s one-third-scale rec center is going to collect much more revenue, per square foot, than the average Fairfax County REC Center.

I rejected the demand analysis provided to Town staff.   For one thing, it was the seller’s numbers, that is, it was provided by (the chosen partner of) the people trying to sell Vienna this new building.  As such, it was unsurprising that it made the building look pretty good.  I identified a handful of fairly aggressive assumptions (e.g., no competition for the relevant pool dollar within the Town of Vienna, no acknowledgement that around half the proposed market area is actually closer to a REC Center than to the proposed Vienna facility, and the presence of what could easily have been a tuneable parameter of 20%, for the fraction of the pool dollar Vienna would collect from the nearby non-Vienna population).  In addition, while the consultants suggested charging roughly the same as Fairfax for Vienna residents, they blithely assumed you could charge 25% more than Fairfax does, for people living outside the Town of Vienna.  To which, all I can say is, you can try to do that, sure.  But in reality, all that means is that revenues were overstated by 20% or so for the half of the market living outside Vienna.  In other words, the rote assumption of a “25% up-charge to other-than-Vienna-taxpayers”, along with (e.g.) not even bothering to locate the three nearby REC Centers on their market area map,  tells me that that demand study really, truly did not understand what Vienna is doing, in going into head-to-head competition with Fairfax County, using a one-third-scale model of the three much bigger Fairfax REC Centers that are within a reasonable driving distance of Vienna Town Hall.  Taking all that together, and the fact that the resulting estimate was grossly at odds with common-sense benchmarks (e.g., what are the losses at the similarly-sized Reston indoor pool), I decided that it would be imprudent for the buyer (Vienna) to trust the seller’s estimate, in this case.  Not with all of those red flags raised.  That doesn’t prove that the seller’s cost estimate was materially biased, but the risk of that appears high enough that this is what I’d have recommended, if Vienna had been my client.

A brief discussion of some relevant issues.

There are certain elements of the demand-side comparison that the Fairfax REC Centers will surely win.  Briefly, these are:

Advantage to Fairfax REC Centers, for paid demand.

  1. Scope of services.  Fairfax can afford to (and does) offer a broader range of services at their facilities than is planned for Vienna, and at a larger scale.  In addition to the core pool/weight/cardio, drop-in child care, ball courts, indoor track, spa, sauna, and so on, they offer (e.g.) nutrition therapy, mini-golf, banked indoor running track.  Spring Hill advertises that they have more than 400 different exercise classes weekly, everything from youth fitness (e.g., tumbling classes) to classes oriented toward the elderly.  and have more than 50 different cardio machines in their 15,000 square foot cardio/weight room.  You get the drift.  If membership decisions are driven by breadth of services available, and one membership gets you entry to all three local facilities, Vienna is obvious at a disadvantage regarding breadth of exercise options offered.
  2. Ability to host swim meets, swim teams, and so on.  The Olympic-sized pools, diving platforms up to 5-meter, large amounts of parking, and so on, allow Oakmont and the other nearby facilities to host regional swim meets, as well as local swim team practices.  I have no idea how much revenue these events and swim team practices generate for the County, but that’s revenue unavailable to Vienna.
  3. Lower likelihood of congestion.  It’s a classic finding of operations research that, for a given average level of use, hour-to-hour and day-to-day variation in demand matters more for smaller facilities than for larger ones.  If you are committed to serving people whenever they show up, this means that total memberships have to be limited to a lower fraction of some theoretical maximum, in a smaller facility, compared to a larger facility.  (This is why, for example, that large urban hospitals can and do operate at a much higher bed-occupancy rate than small rural hospitals.) The REC Centers can sell more memberships per square foot without randomly exceeding facility capacity limits — and so having to turn away people at the door — than a smaller Vienna facility can.
  4. Avoidance of Maple Avenue commercial district traffic.  Just eyeballing the maps, traffic congestion on Maple seems like more of a problem for the Vienna facility than for the REC Centers.
  5. Less directly-nearby competition from private providers.  Vienna has two private outdoor pools and several private gym facilities with a short drive of the proposed new facility.  The REC Centers, by contrast, are in less densely populated areas, and are not directly adjacent to commercial districts, and so face less direct competition from nearby private providers of gym and (outdoor) pool services.

By contrast, I see these factors as an advantage to Vienna, for paid demand:

  1. Greater population density nearby.  There are a lot of people who live within a 10-minute drive of Vienna Town Hall.  By contrast, the nearby Fairfax REC Centers are all located or or near large tracts of publicly-owned land, either park land or school land.  Although the travel times are typically a lot faster outside the Town of Vienna, that does not make up for the sparser population density outside the Town of Vienna.
  2. More homogeneous population.  Presumably, somewhere around half the people you might meet at the proposed Vienna facility will be residents of the Town of Vienna.
  3. Civic pride.  Presumably there will be some draw for this facility, from Vienna residents, purely because it is a Vienna facility.

An important unanswered question:  Overlap of market segments.

On the one hand, a proposed Vienna facility would have more people nearby to it, than to the typical nearby REC Centers.

On the other hand, compared to (say) Oakmont, the Vienna population is also closer to many plausible private substitutes for a public gym/pool, including numerous private gyms, two private pools within the Town boundary, and two just outside of it.  (And, in general, many studies show a positive correlation between population wealth and density of exercise facilities per capita, both public and private.)

A big unanswered question is the extent to which these private facilities effectively substitute for a public facility. 

If true, the location of the Vienna facility near two private pools and several private gyms in the nearby commercial district may reduce demand for Vienna relative to the typical REC Center.  In other words, you may have a lot of people in Vienna who have already made acceptable indoor exercise arrangements or swimming arrangements, and the fraction that has done so might plausibly be larger for Vienna, than for the REC Centers.

To put this in perspective, the Town of Vienna has about 5500 households (reference).  The two outdoor pools literally within the Town of Vienna already enroll 1200 families, which is more than the number of pool/gym memberships that Vienna expects to obtain from the in-Town population.

The only point being that if those private pools are even a partial substitute for Vienna indoor pool facility membership, that could materially reduce Vienna facility membership.

Finally, I would not oversell the potential demand based on the existing study commissioned by the Town.  It’s hard to argue from these two pictures at the top of this post that the existing study consists of a careful analysis of likely demand.

Post #2055: Town of Vienna pool proposal: 2×2=1×4, or why slowing the pool decision is close to costless.

Based on last Monday night’s Town Council public hearing, I get the impression Town Council is going to slow down this decision about building a Vienna pool/gym.  At least for a bit.

I think that’s a good thing.  At the minimum, they are still finding out new facts and hearing new perspectives about this proposal.

I’m just going to add my two cents, which I hope are helpful.  The entire argument that Town Council needed to commit to this right now seems incorrect.  Just as a matter of math.

So I suspect that maybe, somewhere along the way, something has gotten garbled.  Or merely that I misunderstood what was being said.

The apparent  decision framework for last Monday’s Town Council hearing.

As I understand it — and surely as it has been presented to the public — the guidance given by Town staff on this pool/gym issue boils down to the two-pronged choice seen above.   Commit to the Vienna pool/gym now, by raising the meals tax by one cent right now, or you will have pushed a Vienna municipal pool off by a decade.

Don’t know if that’s how the Town intended it, but that’s sure how I heard it.

More detail on the “commit right now” alternative.

The actual text of the commit-now path looks like this:

  • Commit to the pool right now, with a one-cent increase in the meals tax.
  • So that construction may start … five years from now.

Five years?  That’s a bit odd.  Why the long wait?

The full text of that option reads roughly like this:

  • Commit to the pool right now, with a one-cent increase in the meals tax.
  • Save that money for four years.
  • Then issue a $26M bond to cover construction costs.
  • So that construction may start … five years from now.

OK, what’s up with the save-for-four-years step?

My best guess:  To issue the $26M bond to get the construction money, the Town needs to show Wall Street that there’s no risk of default.  But after the large 2020 bond issue (mainly to build the new police station), most of the revenues flowing into the Town’s capital account were already spoken for, to cover payments for existing bond issues.  The annual bond payments for the new $26M bond, on top of the existing commitments, exceeds tax revenue flowing into the fund, including the money from the addition one cent meals tax.  The Town has to save up the money from that additional one cent, first,  to have enough money in the bank, to be able to make those additional bond payments from a combination of future tax revenues and spending down the accumulated four years’ worth of saved tax revenues.

The upshot is that it’ll take four years to accumulate enough savings to be able to float the new $26M bond.  If you want to break ground five years from now, you have to start saving now.  I believe that’s the gist of why Town Council was being asked to raise the meals tax immediately.

That’s my vague understanding of it, anyway.

But doesn’t 1 x 4 = 2 x 2?

Note that there’s a six percent cap on the total meals tax rate.  Given that the Town already charges three percent, I should have cut this graph off at an additional three percent.  I didn’t think it was worth fixing.

My only point is that, in terms of total taxes accumulated via a meals tax, the amount you get from a 1% tax, over 4 years, is (about) the same as you get from a 2% tax, over two years.

So that, if you want to break ground in five years, you could do that with either:

  • A 1% meals tax, starting now, or
  • A 2% meals tax, starting in two years.

Nothing in Virginia statute suggests that the meals tax has to be whole percent, half percent, or, really, any sort of round number.  I’m pretty sure that localities typically choose it to the nearest half-cent purely by convention.  (Possibly dating back to the pre-computer era, when it was common to see a sales-tax chart next to the cash register, and sales clerks would manually look up the tax due, and punch that into the cash register, to get the final sales total.)

But now, for example, in Northern Virginia, neither our state sales tax (4.3%) nor our local sales tax (1.7%) are in any sense round numbers.

And so it seems as if the full feasible menu of options for funding this are shown on the graph above.  If you need a 1% tax right now to achieve a given start date, then you could use any of the following combinations to achieve the same total saved tax revenues,  four years from now:

Above, if you want another half-year to ponder this decision, without delaying the ground-breaking date, you just need to raise the meals tax to 1.2%, for a little over three years.  Then let it drop to 1%.

The total tax received would be the same.  The total tax accumulated by the fourth year would be the same.  But you’d have 0.7 years to think about it, before you made a decision.

There are some practical complications here.  You’d have to have a do-over for the legalities of the initial increase — advertise it, have a public hearing, and so on.  You’d have to write the proposed increase so that 0.2% sunset four years from now, and the rest phases out at the end of ten.  (Instead of the current proposal, written to sunset in ten.)

If this math has always been true, why did it appear that Town Council had no choice but to proceed immediately?

All I can do is guess.

One scenario is that Town Council simply directed Town Staff to find the lowest increase in the meals tax that would accomplish the task.  Perhaps not realizing that a side-effect of that, they would have to make the decision right now.  In pushing the financing to the limit, that pushed the “savings” period to its maximum, which then forced them to make an immediate decision.

At that point, the actual language of the options would be:  If you want the lowest possible meals tax increase, you must act now.  (Which makes perfect sense).  And if you don’t want a meals tax increase, it’ll be ten years until we’ve paid down enough existing debt to be able to fund this.

And that could give you what appears to be an either/or choice.  But only nobody was every tasked with finding all the alternative combinations of tax rate increase, times amount of time imposed, what would yield adequate “money in the bank” for ground-breaking five years from now.

I have no idea if that’s even close to the mark.  But that’s surely how we could have ended up with a set of options that boiled down to, commit to this right now, or wait a decade.

Extras for experts:  Can Virginia local governments intentionally run a surplus?

Answer:  Sometimes.

You can’t just willy-nilly tax people more than you spend.  But you can, per Virginia statute, include money that is not to be spent in the current fiscal year, as shown below;

§ 15.2-2505. Budget may include reserve for contingencies and capital improvements.
Any locality may include in its budget a reasonable reserve for contingencies and capital improvements.

If I had to guess, I’d guess that a Virginia locality can run an intentional surplus (that is, revenues exceed projected outlays for a year), as long as the surplus is a reasonable amount, and it is designated as either reserves, or is earmarked for capital improvements.

Post #2054: Vienna pool FOIA request denials.

 

For those of you who haven’t been keeping score in this whole Vienna-municipal-pool thing, there’s a bit of a kerfuffle over the Towns’ survey of what people want to see in this location.  And by kerfuffle, I mean repeated denial of FOIA requests to see the actual survey responses.

The dog ate it.  That’s more-or-less Town Staff’s polite response.  Legally acceptable response #4, as I see it, of the five legally-acceptable responses that a Virginia government entity may give, to a legitimate request under the Virginia Freedom of Information Act (reference).  “Sorry, we can’t seem to lay our hands on that information.”

Why should anybody give a crap about some arcane technical issue like this?

Here’s why.  As the Town gets serious about this, they need to think about how many customers this indoor pool complex is going to have.  That’s obviously going to affect its financial performance, and so the size of the year-after-year taxpayer subsidy to this pool.

And, as I try to keep emphasizing, indoor gym “serious” pools and outdoor summer “fun” pools are different beasts. But the Town counted every survey response that mentioned “pool” as showing support for an indoor gym/pool, as proposed.  And, apparently, it’s just not in their wheelhouse to split that out so we can see what fraction of those actually said “indoor pool”.

The extent to which indoor pool and outdoor pool are close substitutes is far from clear.  For example, we’ve got 2200 names on the waiting lists for local outdoor summer pools.  Yet every one of those people can buy instant access to any of several local indoor (gym) pools right now.  Not that there isn’t overlap between the two pool user groups, and a certain fraction of the population that swings both ways.  But spinning that the other way, you could plausibly say that it looks like a lot of people want a pool, but maybe  only an outdoor pool, and maybe have no interest in an indoor pool.

In light how how questionable the Town’s existing demand, revenue, and operating loss projections look (see prior post), this now takes on new importance.  Vienna paid to have the survey of resident’s desired use for this property produced and fielded.  It’s nuts not to get as clear an answer as possible, to this fairly important question:  What fraction of “pool” responses specifically said outdoor, indoor, or (other/unspecified) pool.

Putting that another way, is it prudent to vote on a meals tax increase (which, despite what anybody will try to soft-soap you about, is the Town’s green-lighting of this proposal unless something catastrophic occurs), and so commit to spending $26M of the taxpayers’ money up front, and (my estimate) $37M in payments down-the-road, with out having a crystal-clear idea what fraction of Vienna citizens were asking for the type of pool you are planning to supply?

Particularly, when it’s easy enough to do a rough cut of:

  1. indoor
  2. outdoor
  3. didn’t say/too hard to tell/both/etc.

Town Council obviously needs to see this information clearly presented, before proceeding.  Given that it would take me about ten minutes to do that, off the raw survey data, failure to do this is just another flunk for the Town of Vienna decision-making process. 

We’ve had enough of those already.

The simple, key issue:  What fraction of survey respondents said “outdoor pool”.

Peel apart the current FOIAkerfuffle, and the key technical issue is indoor versus outdoor pools.  Generally a different fun/exercise ratio.  Different vibe.

Town Staff (maybe, it’s really Town Staff’s consultants) apparently combined all pools together (indoor, outdoor, unspecified), into just one “pool” category.  Not an unreasonable choice of methods, as long as this big caveat (this is all pools, not indoor pools) is respected.

But then they lean on the resulting high vote total for “pool” total to argue, fairly forcibly, that the proposed indoor pool/gym is obviously Vienna’s clear choice.

There’s an entirely separate and highly important issue that, in all likelihood, “free pool” is what people had in mind.  And all that implies.

Skip that for now.  Focus on indoor/outdoor.  Don’t you think Town Council should see that split, before they commit themselves on this path?  And, despite what anybody says, once they vote to raise a tax, that decision is made, and the rest is detail.

Given what appears to be a rosier-than-rosy scenario about future financial performance of this indoor pool, hadn’t they better pin down this detail first?  Because that future performance counts on having a lot of demand for this pool.

And if, say, we could find even the faintest shred of evidence that half of what you’ve counted so far as your future customers — via this survey — if half those folks actually want an outdoor pool, and maybe have no interest in an indoor pool, maybe you should step back.

We already know a big fraction said “outdoor pool”: A brief lesson in how word clouds work.

So, let’s start with the nuttiest part of this.  We already know that a large fraction of the “pool” responses to the Town’s Annex survey said outdoor pool.

It’s just that nobody seems to have noticed. Because everybody thinks they know how word clouds work. But in fact, there’s more to word clouds than you might think.  Not a lot more. But more.

Below is the word cloud in question, from one of the Town’s contractors.

Source:  Town of Vienna, contractor’s report on The Annex, but it’s been used in a variety of places in the various materials.

Everybody kind-of knows how a word cloud works.  That’s one of those trendy graphics where you input it some sort of text, and the word cloud software gives you a graphic where the size of the word/bubble represents how frequently a word was mentioned.  Big bubble, important thing.  Small bubble, minor thing.  That’s the gist.

In the word cloud above, the input text is the verbatim (free-form, write-in) comments from the Town’s survey.  And the word cloud shows how frequently individual words were mentioned.  (Obviously, excluding the, and, if, but and similar common but un-helpful words.)

A word cloud is a perfectly acceptable data summarization technique to use in this case.  This is a situation where you, the data analyst, have to find a cheap way to summarize like-onto a thousand free-form comments.  And if you’ve ever tried to do this, it’s the point where you — the data analyst — finally realize why surveys give you a defined set of choices, in check boxes.  Taking that mass of free-form text, and (old-school) getting anything useful out of it, is a challenge.  I know because I’ve done it.  As a data analyst, I hate free-form (write-in) fields on surveys.

Sure, you can say whatever you want.  Good for you, the survey respondent. Then I have no clue what to do with it, once you’ve had your chance to express yourself.

So, an expedient solution to cranking out … well, anything useful — is just feed your text to a word-cloud generator, and see what pops out.  As is the custom in the modern world, you have your pick of websites that will do that for you for free, no questions asked.

(These days,thanks to running into somebody who’s up to speed, the first thing I’d do now is feed the text into an AI and ask it questions.  AI, tell me how people in this survey felt about indoor versus outdoor pools?  And you’d get the AI’s general impression.  Not sure you could trust it, but for free, or nearly, who wouldn’t do that?

Last time this technical issue about dealing with free-form comments came up was during discussion over MAC zoning.  At that time, the Town was willing to release the verbatim comments of the survey at issue then, so  I used Excel’s word search function to allow you, hoi pollio, to count word combinations occurring in those comments, to your heart’s content, in this prior post on the Town’s Visual Preference Survey.)

But, really, how is a word cloud any different than just counting up how many times each word occurs in the underlying text source (survey responses, in this case), filtering out the obvious crap (the, and …) and presenting a tabular list.  Other than for the eye-candy impact of the word cloud.

Is a word cloud just a set of word/bubbles, where bubble size is proportional to word frequency in the summarized text?

Oh, heck no, a word cloud is more.  Not much more, but more.

In particular, the proximity of words in the word cloud mirrors proximity of words in the underlying text.

You can tell, just by looking at a word cloud, which words were frequently mentioned near each other, by how near they are in the word cloud.

Bet ya didn’t know that, did ya?

Now have another look at that word cloud, where I’ve given you a little help.

If you now said, “hey, that looks like about half the people said outdoor pool, and half the people said indoor pool”, award yourself an A.

Sure, we can chit-chat all we want about this not being definitive, maybe something-something-something, and blah blah blah.  So, sure, that goofy little graphic is not a smoking gun.

On the other hand, at some point I run out of patience trying to be fair about this.  To estimate the fraction of “pool” respondents that wanted access to an outdoor pool, you’d have to look at the file containing the text of the individual write-in responses.  Which is the core of what citizens are asking to be allowed to do for themselves, as Town Staff appear unable to do it.  But for which, so far, citizens FOIA request have been politely stiff-armed.

It’s not rocket science to do such a count, if you’d been through it once.  Pull all the comments that said “pool”, eyeball for common misspellings and synonyms (e.g., four-season pool means indoor pool, open-air pool means outdoor pool, “exercise” pool likely means indoor, and so on).  Nothing but common sense.  And use of Excel word-search functions.  Then count them.  State exactly how you counted them.  And publish the answer.

And live with the answer, whatever it may be.

The fraction of “pool” respondents that specifically said “outdoor pool” is not zero.  So treating it that way is wrong.  We’re just dickering over exactly how wrong it is.

How do I know it ain’t zero?  Again, not rocket surgery to figure this one out.

We know there are about 2200 names (with some unknown but presumed significant duplication) on waiting lists for local membership outdoor pools.  These are folks who, for sure, want access to an outdoor pool.  And they have (and have pledged to) put their money where their mouth is.  And are lookingat waits up to eleven years to get it.

And so, out of the 1000 respondents to the Town’s survey, are we supposed to believe that NONE of those folks bothered to respond, or if they did, none of them said outdoor pool?

That’s not even remotely plausible.  So we know the number ain’t zee-roh.  At this point, the Town needs to stop treating it like zee-roh and if nothing else, let some citizens figure out what the actual fraction is, in a completely transparent manner. 

But right now, we can’t do that for ya.  Or FOIA.  Owing to not being able to get our hands on that file.

Conclusion

With the amount of money we’re talking about here, it’s time to stop screwing around. 

Plus, to be rude, even though we aren’t supposed to say that Town Staff are deliberately keeping anybody from finding this out, that is what any sane person would suspect, until proven otherwise.

So prove it otherwise, please.

In this post, I’ve explained the importance of the underlying issue, they key analysis citizens wish to perform with the file, the simple quick-and-dirty technique that will form the backbone of the analysis, and why there is no legitimate excuse for not having ready access to this file, that the Town spent quite a bit to produce.

As a former consultant, I’ve known consulting outfits that claim that any data product they produce, for you, using your money, surveying your respondents, is theirs.  They do that, and ensure that the data is specifically NOT listed as a deliverable under the contract, so that if the client wants any further work, no matter how trivial, they get to charge another fee, for doing that.

But legally, that’s nonsense.  The raw output of a survey is work-for-hire.  All claim to copyright of work-for-hire belongs to the hirer — in this case, the Town.  By contrast, a recalcitrant contractor might have a slender claim that their particular graphic is protected.  That word cloud above, sure, they can claim copyright on it, if the client is pliable enough to let them do that.  (For Federal contracts, I recall any such practice being banned.)  Even if the contractor and only the contractor has the file, and even if you didn’t specify the file as a specific deliverable in the contract, the worst that can happen is that the contractor now has the right to charge a reasonable fee to cover the cost of copying it and emailing it back to the Town.

Finally, I can assure you this file didn’t accidentally get erased, or anything like that.  As somebody who has done and paid for surveys, whoever actually compiled the file of survey responses treated it as the precious object that it is, and made a skazillion backup copies.  So, absolutely the file exists.

The main point here is that Town Staff don’t have the right to egg the Town on, into what might be a minor bit of economic suicide, or keep stonewalling on this just because the results might not help “your side” of this issue.  That’s not the way good decision-making works.  At least, not outside of the TOV.

Step back and understand what we’re doing.  We’re asking seven talented amateurs — Town Council — working in essentially un-paid part time jobs, to be responsible in their decision to green-light the spending of tens of millions of the taxpayers’ dollars, and committing the Town to subsidize this facility forever.  The last thing they need is having to screw around like this, just to see a simple cut of the data that is obviously relevant to their task of evaluating the cost and benefits of this proposal.

Post #2053: Vienna pool, Kelleher’s 2014 insight, validated.

 

I attended last night’s Town Council meeting, for the session regarding the proposed Vienna pool/gym.

Surprisingly, I have a lot still to say about this issue.

Unsurprisingly, not all of it is good.

Here, I just want to plow my way down to first thing you have to know, about this pool thing:  Kelleher’s “inefficient scale” warning.

Then, by tacking a little bit of competition onto that, I arrive at this conclusion:  In this situation, the cost of scale inefficiency is paid by the taxpayers.

Not to exclude the possibility that we might pay more than that — not ruling that out, at all — but (at least) the scale inefficiency of the facility shall be paid by the taxpayers.

Which, cool enough, can be restated as, if you want boutique fitness, it’s gonna cost extra.  (Cost the taxpayers, that is.  Users still pay something near the low price set by Fairfax, for its REC Centers.)

Number-wise, based on this (very) simple economic model, you’d expect the Town’s operating losses to be 50%, or $1.1M per year.  Sorry, at least $1.1M per year.  Permanently, as explained below.

And when I roll-up that stream of taxpayer subsidies (to cover those operating losses), I get $37M as the “present value” of the total.  Which can then be compared directly to the $26M it should cost to build the facility.  Suggesting that likely operating losses are more important than the capital costs for a Vienna pool.

But first, the news in brief:  Last night’s Town Council meeting, as regards the proposed Vienna municipal indoor pool, in brief

Among many other things, at that meeting, Town Council listened to citizen comments on what was, formally, a public hearing regarding the proposed meals tax increase.  But what was, in fact, a hearing (in the classical sense, as you got to speak and Town Council got to hear you) on the proposed Vienna pool/gym in general.  Maybe 25 people got up to speak.  At the end, Town Council “left the public hearing open”, legally-speaking, for any additional written comments .., and they’ll revisit next month.  Basically, deferred any action until after Thanksgiving, after listening to the citizens.  I left before that last bit, but got reliable word that that’s what they’d done.

I have hereby saved you listening through a whole lot of chit-chat.

The main show:  Kelleher’s Validation

Speaks for itself, right?

In the table above, the numbers in yellow are facility annual operating costs.  The total annual costs of running the Vienna facility (more-or-less, a mini-rec-center) and a Fairfax REC Center.  Vienna’s is from their proposal, and, in my estimation, is probably a pretty good guess.  Fairfax, by contrast, is data:  total REC Center costs divided by nine (the number of REC Centers).

To their left, you see the size, in thousands of square feet of (what in any normal building would be called) floor space (but owing to the fact that a good chunk of it is, in fact, liquid, gets some other awkward term here, but … it’s the analog of floor space.)

Reading across the big fat line of data, compared to the Fairfax REC Center, Vienna’s facility has:

  • 33% of the floor space,
  • 71% of the cost, and so (by long division)
  • 212% or twice the operating cost per square foot.

Now comes the simplifying assumption.  (Economist-speak for, the following crap may or may not be true, but I have to get rid of some details here, to get to a punch line.  Plus it’s not unreasonable.  We’ll revisit at a later date:)

If the number of annual memberships you can sell and service is directly proportional to the size of the facility …

Then, per the data above, operating cost per member in Vienna is going to be twice what it is in the surrounding Fairfax REC Centers.

Now, would I like to have more and better data before staking my life on this claim?  Yep.  Am I aware that there’s a lot to unpack in that simplifying assumption.  Like, doesn’t this assume the facilities are operated with equal … technical efficiency and so on.  Yep, sure am.

We can talk about that later.

That said, and I don’t know about you, but I’m tickled to have derived any estimate at all, for likely ongoing taxpayer losses.

What this estimate may lack in refinement, it more than makes up in clarity.  No hocus-pocus.  Two facility total costs, two facility sizes.  And the assumption that, in essence, the facility size is directly proportional to annual memberships sold and serviced in/for that facility.

We can refine it later.

Right now I need to get to the punch line of the warning that 2014 Town Council Member Kelleher left us, as reported by Brian Trompeter in the 2014 Patch.

Taxpayers pay for scale inefficiency:  Adding competition to Kelleher’s economies-of-scale.

Simplifying assumption 2:  You can’t charge more than Fairfax.

Not to any material degree, anyway.  We can bat this one back and forth, but that’s … kind of how markets work, if you get my drift.  We can discuss it later.

For now, all you need to know is that, as a matter of policy and pride, Fairfax sets REC Center rates to cover operating costs.

(And if you look further, there’s a whole fascinating (but apparently industry-norm) variation in tax subsidy for specific recreation activities.  Golf, e.g., is expected to cover more than just operating costs.  REC Centers, operating costs.  Lot of in-the-parks stuff, less than operating costs.  Right down to walking in the sunshine in a county park, free.  It’s like common-sense Socialism.  But the point is that the REC Centers sit in the middle of the spectrum, in terms of paying their own way.

By contrast, if you look around, there comes a moment when the penny drops, and you understand how the Fairfax REC Centers, in their entirety — not just individual size, but the fact that they are big, few, and sparse — the REC Center system of nine is the rational design of a public gym system for a car-mobile population.  And, as I learned talking to the front desk personnel at Oakton, that we’d best take care not to destabilize the local ecosystem.  Or, as they put it, when my wife and I mentioned Vienna’s plans, “Why”.  To which we agreed.)

It’s not even worth putting this on a chart, because it’s just algebra.  If Vienna’s price per contract = Fairfax price per contract = Fairfax cost per contract, then Vienna’s operating loss percentage is 53%.

Forever.  Vienna is doing nothing wrong.  There’s no “technical inefficiency” in how they are assumed to run their facility.  There’s nothing that can be fixed.  It’s purely inefficiency due to small scale.  Scale inefficiency.

If we measure the scale inefficiency in this case by Vienna’s average cost per membership compared to the Fairfax REC Centers, the conclusion is that the taxpayer subsidy is 100% of the scale inefficiency.

I know it’s a misuse of the word, because we associated boutique with both smaller size, and higher quality, for want of a better term.  So it’s sloppy, but it gets to the pith of it:

If you want a boutique recreation facility in Vienna, it’ll cost ya.

Conclusions:  Operating losses are more important than capital costs.

First, Council Member Kelleher was right, in 2014, on a really important point.

That point needs to be recognized.  Even if it’s not entirely convenient, for one side of this pool discussion.

And shame on the 2024 TOV’s entire stinking decision-making process for ignoring her.  She was right then.  Guess what?  She’s still right.

I have a lot more to say, but let me get that stream of subsidy payments, off into the future, rolled up into something equivalent to a bond.  So we can compare its size, to that of the proposed $26M bond issue.

So this is the point where I take permanent annual payments of $1.1M (half of operating costs), and “roll that up” to a number that’s equivalent to a bond  We can dicker over the right interest rate to use, but I think it’s traditional to use the interest rate you pay if you need to borrow money.  Which is about 3% interest rate, currently, for AAA municipal bonds.  Leading to a net present value of $37M. 

Which is bigger than $26M.