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.

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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.

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Today I sent the following, in plain-text form, to Town Council, via Council@vienna.gov.

Edit:  And had it returned by the Town’s email system, for an incorrect address,  because the mail-to link on the Town’s Annex Reimagined web page literally addresses the mail to mailto:council@vienna.gov.

So now I’ve re-sent it, manually overwriting the address to remove the mailto:.

I have a decrepit old computer and old software, but so maybe it’s my fault.  Or, maybe if you know HTTP, you can figure out what’s going on, as the mailto link looks like this, when page source is shown:  I note that ASCII 109, 97, 105, 108 spells out “mail”, so yeah, their mailto link, if you want to send something to Town Council, is mal-configured.

to&nbsp;<a href="mailto:&#109;&#97;&#105;&#108;&#116;&#111;&#58;&#99;&#111;&#117;&#110;&#99;&#105;&#108;&#64;&#118;&#105;&#101;&#110;&#110;&#97;&#118;&#97;&#46;&#103;&#111;&#118;&#63;&#115;&#117;&#98;&#106;&#101;&#99;&#116;&#61;&#67;&#111;&#109;&#109;&#117;&#110;&#105;&#116;&#121;&#32;&#70;&#101;&#101;&#100;&#98;&#97;&#99;&#107;&#58;&#32;&#65;&#110;&#110;&#101;&#120;&#32;&#47;&#32;&#77;&#101;&#97;&#108;&#115;&#32;&#84;&#97;&#120;&#32;&#73;&#110;&#99;&#114;&#101;&#97;&#115;&#101;">council@viennava.gov</a> 

That doesn’t give me a warm fuzzy with regard to the upcoming decisions.

Continue reading Post #2051: My letter to Vienna Town Council regarding the proposed Vienna pool/gym.

Just for the sake of argument, assume that it has already somehow been decided that Vienna must build a pool.  How would you try to get the best value for the taxpayer dollar, in that case?

First I’ll describe what I’d do, if I were running this show.

Then I’ll run through some advantages and drawbacks.

Then I’ll explain why I think this option makes sense.  If you’re bound and determined to have a Vienna pool.

An alternative proposal.

I would build an outdoor membership pool.  Essentially modeled after our many existing outdoor membership pools.  But I’d make access more equitable, and otherwise adapt how those pools are run, to the public setting.

The point is to guarantee that everybody’s kids get some convenient opportunity to swim in the summer sunshine.  (Awww.)  And not just the kids of those of us who managed to snag a membership to one of the local private pools.  In a region with generally long waiting times for access to the nearest pools, that should be an attractive advantage of living in the Town of Vienna, for young families moving to this area.

So, borrowing from the prior Q-and-A post, this would be an olympic-sized pool crammed into the existing three-acre site.  As pictured above.  Or, more likely, two or more separate pools, totaling the one-third-acre of water surface of an olympic pool.

This would not be pretty, as the proposed gym/pool building would.  In fact, it would require (another!) big ugly concrete parking garage.  But, given that we’re already slated to have one of those just down the street (at the Patrick Henry Garage and Library), I find it hard to object to another one based on the looks.

That ugly garage would have two saving graces.  First, it would double as parking for the adjacent ball fields in the off-season.  Second, it would serve as an excellent sound barrier for the adjacent homes (because, I can tell you, summer outdoor pools get really noisy.  I sure wouldn’t want to live next to one.)  That second point strongly suggests off-season use as pickleball courts, if that could be accommodated, as pickleball generates a high degree of nuisance noise..  I address that in the section on off-season use.

The Town would still be free to “schedule” the pool, within reason, as the local private pools do.  This would accommodate a reasonable load of (e.g.) water aerobics class, swimming lessons, early morning swim-team practices, and so on.  With the understanding that these would be scheduled for non-peak periods.  In addition, you’d likely reserve at least a section of the pool for lap swimming at all times.  The rest of the pool and time is generally “open swim”, that is, kids just messing around, outdoors, in the summer.  Which, to be clear, would be the main point of this pool, by analogy to the local private pools.

Swim meets are a problem.  The pool closes to general use during swim meets and swim team practices.  Practices are not an issue because they can be scheduled for the early morning.  But swim meets displace all other users of the pool, for the duration of the meet.  It seems like, in fairness, there should be a fairly stiff fee charged for the privilege of doing that.  I’d like to accommodate a swim team, but not to the extent of, in effect, offering them exclusive use of the valuable pool space, for extended periods of time, for free.

For the physical plant, beyond having a big rectangular hole in the ground, or two, my feeling is that no amount of small-child-amusement-devices is too many.  So, e.g., for sure, I’d have one of those water-squirts-out-of-the-pavement spaces, and so on.  Whatever reasonably safe, water-oriented amusements would fit.  The less space that they exclusively occupy, the better.

Finally, I have no clue whether this is an economically viable proposal or not.  On the one hand, you’re not building and finishing an indoor structure, other than the locker rooms.  On the other hand, you start off by paying for a big concrete parking garage.  My sense is that you could build and equip one of these for less than $26M, but that’s just a guess at this point.  (E.g., I think the Town chipped in about $4.5M to buy into around 100 spaces in the Patrick Henry parking garage.  So in round numbers, you’d pay $9M for a 200-space garage, leaving just $14M to build the pool and locker rooms.)

I suspect, but cannot prove, that this is an economically viable proposal as far as covering operating costs goes, based on the thousands of names on local outdoor pool waiting lists, and the need to sell just 900 annual memberships to cover twice the actual observed annual operating costs of the (half-as-large) Vienna Aquatic Club pool.  The goal here is for Vienna to do as Fairfax does, and have the pool/gym users at least cover the annual operating cost of the facility.

But, people are funny, and even in this day, with a community as upscale as Vienna, you might have people turn up their noses at the thought of using a government-run pool.  So, as with any expenditure of millions of dollars of the taxpayers’ money, surely you’d want to survey the population first to make sure this whole idea isn’t too far off base.

But, bear in mind that this proposed outdoor “fun-centric” pool bears the same long-term financial risks as the current Town of Vienna proposal.  Once you put that big hole in the ground, the taxpayers are on the hook for keeping it running, in perpetuity.  If it turns out that the taxpayers have to keep filling that hole in the ground with cash every year, well, that’s just the way it is.

Off-season use

A huge drawback to this is that the pool is only open in the summer.  It’s inherently wasteful to take this rare commodity — land in Vienna — and allow it to sit idle three-quarters of the year.  If you’re spending tax dollars on this, you are burdened to find some secondary, off-season uses.

1 Pickleball.   One obvious off-season use would be to paint pickleball courts onto the pool surround, adjacent to the parking garage.  I say that because a) the standard pickleball court is quite small (60′ x 40′, say, per this reference)? b) the parking garage (if properly constructed) would block the noise from reaching the neighbors, and c) the pool surround is going to be concrete anyway, so why not, and d) apparently, pickleball got a lot of votes on the Town’s original “survey” regarding uses of this property.   You’d have to use de-mountable net posts, but that’s a standard item.

2 Overflow parking for the adjacent ball fields.  The area around the ball fields seems to get parked pretty full, at peak times.   Having a big municipal parking lot across the street would be helpful.  But this also brings up the difficult of keeping that parking for pool patrons only, in the summer.  I have no ready solution for that.

3 Year-round pool, via three-season air dome, subscription-only, for some part of the overall pool square footage.  A final option is to split the pool into two physical sections, and cover one section in an air dome (“pool bubble”) outside of the summer season.  That would allow three-season indoor use of the portion of the pool covered by the dome.

Source:  This place.

The huge surprise to me is that these pool-bubble things are remarkably cheap.  Or I am looking at something misleading.  A dome big enough to cover a minimum-for-swim-team pool (call it 85′ x 50′), with blowers and heaters, works out to just over $40K.  If those last 10 years, and so on, the amortized capital cost of the dome add-on is just $4K/year.  Clearly, heating it would be a huge expense, but … once you’ve gone to the expense to build a pool, it’s entirely plausible that you may, in fact, have enough demand in the area to pay for running at least a small three-season dome-covered pool.

A second randomly-selected on-line supplier (here) suggest $12/square foot for the entire package, including lights.  For the same dimensions as above, that also works out to about $40K.  So … yeah, that appears to be a real price, for one of these, big enough to cover a pool that’s about one-third the size of an olympic pool.

Your choice of colors!

I know nothing about these domes, so I’ll stop there.  I only include this much information because I was floored at how cheap these were, in the context of the chunk of change that Vienna is getting ready to lay out.

It’s an environmentally-unsound option due to the need to heat this large un-insulated surface.  I am sure it would pay the Town to install something other than inefficient resistance electric heating that comes with the standard package.  Adding three-season pool use would increase the carbon footprint of the pool complex, either way, just less with, say, a heat pump.

That said, caveat emptor for any of this.  If you think about it, off-season use of this facility may generate significant costs, versus, in essence, putting on the pool cover, turning off the lights, and locking all the doors until next year.   Depends, among other things, on the cost of keeping the place open, and the revenues the off-season uses generate.  If few enough use it in the off-season, and it costs you money to keep it open, it may not be worth it to keep it open.  Just because you can doesn’t mean you should.  ‘tsall I’m saying.

Equitable access to the pool.

Annual pool memberships would be offered, analogous to the local private pools.  The membership to this pool would cost about the same as that of other local private pools, plus or minus, because there’s no such thing as magic, and the Town would face at least the same level of operating costs as the local pools.  These memberships would guarantee you access to the pool at all times other than special events such as swim-team practices or meets.  In other words, these memberships would be a right to use the pool during peak periods of demand, and any other time that the pool was open for general use.

The Town could, at its option, offer some income-related reduced price memberships for lower-income residents..  But this being the Town of Vienna, I wouldn’t hold my breath waiting for that to happen.

The number of these “unlimited” annual memberships would have to be limited, at least initially, to no more than 900.  That’s based on the congestion I observe at my local pool during peak periods of demand.  Any more than that, and you can’t guarantee access to the pool on a hot mid-summer Saturday.

Memberships would be for one year at a time, and there would be no right to renew.  They would be offered first to Town of Vienna residents.  If some remained, they would be opened up to non-residents, possibly for a higher annual fee.  So it would be first-and-foremost a Town of Vienna thing.  And if demand for those memberships exceeded supply, at either stage of that process, the right to buy a membership would be allocated by annual lottery.  (If not, then of course, if you wanted to renew your existing membership, you could.)

While my knee-jerk reaction was to allocate the tickets at random, in fact, in the 21st century, surely, for people outside the Town who want access, you could allocated it by closest-first, giving preference to those whose addresses are nearest the Town boundary.  Don’t know if you’d want to do that, but it seems like there is no technical barrier to doing that.

The key point is that unlike the local private pools, everybody in Vienna who was interested would have an equal opportunity to buy a membership, in any given year.  This equity consideration seems like a fitting way to modify the current private membership pool model, for a government-sponsored role.

In particular, I note that my pool, and I think a lot of the local private pools, allow you to convey your membership with your house.  (Otherwise, if you give up your membership, you have to sell it back to the pool, for them to resell.)  I’d be willing to bet that this unusual feature is a vestige of the desegregation era.

Buyers-but-not-users.  There’s still an issue of people buying annual memberships, but not using them.  In a Town with this level of income, you really have to consider that possibility, given the price the Town would charge.  I would not bar that practice, and I would not deny subsequent memberships.  I would simply adjust the initial total of 900 upwards, to the extent that, on average, the presence of these buy-but-never-use customers reduce peak pool crowding.  Basically, let folks buy them regardless, and just adjust the total memberships upward if, on average, enough people buy them buy do not use them.

Swim team clause:  Separately, I see that an annual lottery may screw up any use of the pool for swim team enthusiasts, because you and your kids might get kicked out of the pool, at random, in any given year.  You can patch that over by offering a different type of membership that allows access to swim-team-related practices and events only, for those who want to remain on the swim team, but were not fortunate enough to get an annual membership for the year.  I would not, under any circumstances, give swim team families preference in the general membership lottery, over others.

Completely unlike the local private membership pools, a Town-run pool would offer the option of one-day pool passes.  And so, in theory, everyone in the Town of Vienna that wanted summertime access to a local outdoor pool would have it, to a degree.  (Again, seeking better equity of access.)  But those would only be usable if the pool and associated parking lots still had room.  So, effectively, daily access passes would be limited to non-peak periods, if the pool and parking routine fill at peak times.   And for those with a strong interest in using the pool, the membership would still be desirable.

The presence of day passes makes the admission decision difficult at peak periods, because you ideally always want to have room — in the parking garage and the pool — for any annual-membership-holders who show up.  (So, how do you know how many day-pass holder to let in, early on what should be a peak day?)  Surely there’s an operations research answer to a best way to do this.

There is a seemingly-difficult business decision, in that by offering day passes, you may reduce the demand for season-long memberships.  In other words, those who were “on the fence” about buying a season pass might pass on that, if they knew they could by a la carte access to the pool.  My observation from Oakmont is that almost all of their business is memberships.  Not clear if that would hold true for a Vienna municipal pool.

The Town would, of course, have a web page that showed the current status of the pool, in real time.  So if you got the urge to take your kids down to the pool, and didn’t have a membership, you could check that page first before you mentioned it to your kids.

Part 2:  A quick pros and cons.

Pros:

• An outdoor pool is the epitome of community-centric, family-centric suburban fun.
• In this immediate area, this public-outdoor-rectangular-pool would be unique to Vienna.
• Unlike the Town’s proposal, this is not simply a small-scale copy of the nearby REC Centers.
• This fills a niche with plausibly proven demand, as evidenced by long membership waiting lists at private outdoor pools in this area.
• The private sector cannot supply more outdoor pool memberships in this area (explained in prior posts), giving a first-principles argument in favor of government action in this area.  (By contrast, you can buy into private gyms, with or without indoor pools, all over this locality).
• Plausibly, might even cost less than the facility proposed by the Town.
• Possibly, a lower overall carbon footprint than an enclosed gym.  (For sure, you wouldn’t have to air-condition it.)

Plus, pickleball without annoying the neighbors.

Cons:

• Largely single-season use.
• Other gym components are lost (e.g, weights, cardio, indoor ball courts).  But more on that below.
• Fewer opportunities for permanent employment.  (Most of the employment would be summer-season employment only).
• This is not the product of the official, Town-guided processes that arrived at the Town’s proposed mini-REC-Center.
  • This might add to time-to-completion.
  • But more likely, this is dead-on-arrival, specifically because it wasn’t arrived at by the Town-Staff-guided process.

And, likely, kinda ugly.  Good news is, we get choice of colors on the dome.  Bad news, we have to color-coordinate with the garage.  Dare I say it?  This might be viewed as a bit down-scale, for Vienna.  But I say, add some rusty 8′ chain link fence, and I think we’ve got ourselves a look. 

Part 3:  Rationale and justification

First, I cede the decision to those who want a pool.

That decision — pool or no pool — is way above my pay grade.

It’s an essentially political decision, for our politicians to decide.  So I’m just going to start with the assumption that, somehow, it has been decided that we want a Vienna pool.

My sole goal, then, is to try provide the greatest value for the taxpayer dollar, conditional on our elected representatives having decided that it’s time for Vienna to have a pool. To be clear, “value” to an economist is focused on what the consumer wants, not what necessarily what is objectively best in terms of (say) population average health, or in the look and feel of what passes for our downtown area.

Next, identify a proper role of government in this situation.

First, any traditional role of government in looking after “the poor” does not apply to Vienna.  At least, not on average.  We do have some families whose incomes are below the Federal poverty level.  But they are rare, and they are not the principal market for this pool.  They are rare enough that offering sliding-scale (income-related) discounts for pool passes should have minimal impact on the pool’s finances.  (Such discounts are now being considered by Fairfax County, for their REC Centers and other facilities (reference).

Further, as the Vienna “tear-down boom” proceeds, with small houses being replaced by houses that are as large as the law allows, the average income of Vienna residents continues to rise.  Simply put, economic forces are slowly displacing the middle class here, in what I have termed the McLeanification of Vienna (Post #308).

As a result, the task at hand is to build a public pool appropriate for the wealthiest town or city in Virginia (reference of unknown quality).  That’s who we are now.  And if current trends continue, we are only going to be more-so, in the future.

Second, in the U.S., we generally frown upon having The Government directly provide services that The Market can provide just as well.  People need to eat, but we don’t generally have government-run farms.  We have government-distributed food, but only as a byproduct of agricultural price supports.  If we are collectively concerned with the ability of the poor to eat, and seek a government solution, we give people money-equivalents (SNAP), and let the market do the rest.  (Putting aside the presence of inner-city “food deserts” lacking grocery stores, it’s more efficient to do it this way.)

For completeness, I note that I’m ignoring all the classic, agreed-upon roles of government, e.g., “provide for the common defense”.  This isn’t a discourse on government.  I’m really focused on a justification for, essentially, discretionary spending  in the general area of public parks.  I think we generally still agree that government has a role in providing some parks?  But these days, I’m not quite sure of anything.

So the core of the task is to look for something of value that the Citizens of Vienna want, but that the private market cannot provide.  Or provide well.  Or provide cheaply, or conveniently.  Or, equitably, whatever that may mean to you.

Next, identify unfilled consumer wants in this area

The only demonstrated want that we have around here, relevant to this issue, that cannot be filled by private enterprise, is for a new outdoor membership pool. 

Arguably, a close second is the whole swim-team thing, whether indoor or outdoor.  For those of us outside of this culture, local private pools maintain a sort of swimming Little League (NVSL).  Each private pool has a kids swim team, the teams compete over the summer, and kids compete with other kids of their own age.  (I’m not sure here, but I think this implies that if you can’t buy a pool membership, you can’t get your kids into the (equivalent of the swimming) Little League.  Which, if true, would be kind of sad.) Separately, local high school swim teams need indoor pool space during the school year, and these teams often practice at the Fairfax REC Centers.  So an outdoor pool would only satisfy the demand for Little League-type summer swim teams, not the off-season demand for school-based swim teams.

The inability of private enterprise to expand the number of such pool memberships was explained in prior posts.  Those existing private membership outdoor pools are creatures of law and regulation, dating back to the era of desegregation.  They have huge waiting list times for membership, and it’s unlikely that those waiting lists will ever go away.

Secondarily, there’s always the argument that while private enterprise may provide those services, they are too expensive.  And, sure, that may be true for some, or for many.  But the economist’s answer is that if so, and if the market for those services is competitive — and I would argue that the for-profit gym market is downright cut-throat — then the costs to the consumer for those privately-offered gym services are more-or-less an accurate reflection of the resources used in providing the service.  If you break it down, this argument is really no different from saying that, e.g., cars are too expensive.  Arguably true, but not in and of itself a rationale for having the government manufacture and sell cars.

finally, Know your market segments, or why, as a life-long weight lifter, I really don’t care if the Town’s gym includes a weight room.

The point of this section is that a lot of the services proposed for the Town’s pool/gym have no “synergy” with a pool, or each other, and do not encourage any type of “community” interaction.  In effect, the proposed gym is an amalgamation of almost completely separate exercise facilities, that just happen to be grouped in the same building.

For much of what’s been proposed, in my opinion, on any given day, users of different types of exercise will share the locker rooms, and not much else.  So, other than convenience in constructing the building, there’s not a lot of reason to co-locate all of those exercise activities in one building.

Let me illustrate by talking about the weight/cardio room.

I use the gym for weight lifting and cardio.  Nothing intense.  Just a couple of 45-minute sessions a week.

First — just to get this out of the way — there’s no way the Town can offer a cardio/weight room that’s as nice as the one at the Oakmont REC Center.  They don’t have the space.  Which means they can’t have the variety of equipment, and they can’t offer the overall spaciousness that Oakmont can.  And, speaking as guy who spent a lot of time lifting weights in dark, low-ceilinged basement gyms, once I saw Oakmont, there was no going back. (FWIW, the weight rooms at the other two local REC Centers aren’t as nice as Oakmont, either.)

So, from the start, the Town’s offering for weight/cardio is going to be inferior to the nearest REC Center.  It’s just a matter of space.  And of the number and variety of machines that a smaller space implies.

My second observation is that there is little “social interaction” among the weight-lifting-and-cardio crowd.  Generally speaking, we’re there to get our business done and be gone.  Not a lot of chit-chat going on in the weight room, other than between people who arrived together.

Third, as mentioned earlier, weight/cardio rooms are not family-friendly.  Most bar small kids due to safety concerns.  So these are generally not facilities where the whole family can enjoy (?) lifting weights or mindlessly plodding on a treadmill together.

My final observation is that, in any one visit to the gym, there’s almost zero overlap between the weight/cardio users and the pool users.  The pool users are there to swim, the weight/cardio users are there to weight/cardio, and never the twain shall meet.  Let me just say that I’ve never gotten a whiff of chlorine off somebody exercising in the weight room.

All of this tells me that there is essentially zero synergy between pool, and weight/cardio rooms, or, on any given day, between the people using the pool and the people using the weight/cardio rooms.  For the typical user, for the typical visit, you could just as easily have those two gym functions located in physically separate buildings. 

This is all by way of saying that I think demand for a pool would be almost completely unaffected by the lack of a weight/cardio room.  Nor would those weight/cardio users be missed, in generating a “sense of community” in the facility.

(Admittedly, this argument ignores families that split up at the door to the facility, with each member off to do their preferred exercise.  But, honestly, I just never see that at the Oakmont REC Center, so I don’t think it’s common.)

Finally, places offering weights and cardio are a dime a dozen.  It’s the core of what for-profit gyms offer.  So, for a user like me, the Town would be providing a service that is readily supplied by the private sector.  For the segment of your market that is weight/cardio only, there would be no strong attraction to using the Town-supplied facility versus others, at roughly equivalent prices.

My point is that of the two big-ticket items in the Town proposal, the second (weight/cardio) really has almost nothing to do with first (pool).  There is no unmet need that the Town is filling, with its own weight/cardio room.  And, I suspect, it adds almost nothing to the “sense of community” that a Town gym might provide.

For exercise classes and maybe some of the other items, there’s an argument that they help foster a “sense of community”.  But by and large, co-locating these disparate exercise services in the same building is mostly a convenience for running the place (e.g., just one receptionist needed), and offers no particular “community” benefit.

Conclusion:  When I ask where the value is, the answer comes up “outdoor pool”.

The Town’s proposal is for a small, something-for-everybody, year-round gym.  Not a bad concept, for a government-run facility.  And well-proven, given that it’s essentially identical in outline to the Oakmont REC Center, build in 1988.

But the small scale of operations, particularly of the pool, is going to be a killer, cost-wise.  Particularly when you’re located near three County REC Centers, whose lower costs are going to cap what you are going to get away with charging.  (And, that small pool does not meet the needs of one very swim-intensive market segment, the “swim team” crowd.)

But in order to have a much bigger pool — indoor or outdoor — you’re going to have to have a parking garage.  That’s just the reality of the fact that cars take up a lot of space. Were it not for the fact that there’s going to be a big parking garage right down the street (the majority of the Patrick Henry lot is going to be for the garage, the library is more-or-less the front facade of the garage), I’d hesitate to suggest this.  But we’ve already got one big public garage in the works, so it’s hard to see where another one somehow spoils the neighborhood.

There’s no unique rationale for government action in building yet another indoor pool, given the plenitude of gyms — public and private — that either offer the same pool/weight/cardio/etc combination of service, or offer some subset of that.  Both the private and public sectors already provide these.

Nor is there a lot of value-added evident in Vienna doing that, other than for the sense of community you build by exercising with your neighbors, rather than strangers.  That, and saving a few minutes’ travel time to any of the three nearby REC Centers.

But a “fun-centric”/exercise-second outdoor pool is something that the private sector cannot provide more of, in this area.  And, that outdoor pool experience — bunch of kids splashing in the pool — is exactly the sort of activity that you think about in terms of community recreation.  (As opposed to, say, weight lifting.)

For free, you’d get to throw in some off-season pickleball courts that wouldn’t annoy the neighbors, due to the presence of the sound-stopping garage.

And, maybe if there’s demand for it, you could add a small three-season bubble, for part of the pool.  That’s an energy hog, I think, but it would accommodate a known market for (e.g.) swim team practices.  (But, as with the pool itself, only if that market is big enough to cover the cost of owning and operating the bubble.

To recap:

• The one thing that money can’t buy around here is more memberships to outdoor pools. 
• The private sector cannot fill this demand because our outdoor pools are legal, zoning, and economic relics of a bygone era.
• There are literally thousands of names on the local private outdoor pool waiting lists, begging to drop $1K a year on an outdoor pool membership.
• I can’t be the only one who sees this as an opportunity.
  

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