Outdoor Aquatic Facilities
Evaluating what you currently have and what you want
By Jeff Bartley
People in parks and rec often hear the comment, “Pools never make money,” but is that accurate? The best answer is, “It depends.” As with any business situation, each pool’s location, demographics, features, pricing, competitors, and other related conditions impact the operation.
Operating Expenses Vs. Cost Recovery
It may come as no surprise that older, traditional pools with limited features and in smaller communities require an operating subsidy. To support this article, I conducted operational surveys and studies for a variety of market sizes and geographic regions. Due to weather conditions, the 2012 and 2013 surveys are more indicative of a typical summer pool season. These studies indicate that 85 percent of older, traditional pools reported operating at a subsidy. The cost recovery of revenue compared to expenses for these pools averaged around 50 percent.
On the other hand, larger community water parks with many amenities (including water slides and lazy rivers) and located in larger populated areas generated higher seasonal revenues—with an average cost recovery of 100 percent. This doesn’t specify that all of these facilities operated without a subsidy. In fact, approximately one-half recovered their operating expenses, and the other half operated at a subsidy.
According to study results, modern aquatic centers with a modest number of amenities fell somewhere in between. Approximately 25 percent of these facilities recovered their operating expenses, while the average cost recovery was approximately 75 percent.
Additionally, results show that newer outdoor facilities with several fun “water park” features and located in larger communities are able to operate without a subsidy; some even produce a seasonal operating profit. A handful of community water parks reported operating profits of as much as 20 to 50 percent. Facilities of this nature are proven to be more the exception than the rule. A table of more typical conditions follows:
Typical Operating Conditions
Facility Type Expense Ratio Average Cost Recovery
(expenses/water surface area) (revenues/expenses)
Traditional Outdoor Pool $12 - $15/ s.f. 50%
Modern Aquatic Center $15 - $20/ s.f. 75%
(modest features and population base)
Community Water Park $18 - $25/ s.f 100%
(many amenities and large population base)
Communities are typically interested in analyzing their budgeting information for one of two reasons:
They are considering developing a new facility or updating an existing one, and want to plan for the operational expenses.
They have a facility that is operating at a subsidy, and are trying to determine if they are the exception or the rule.
The basic order of business is to create a budget for expenses. If there already is a budget, you are likely trying to determine if it is appropriate. A typical budget includes the following:
Staffing/labor
Chemicals
Utilities
Maintenance.
Supplies/Office Administrative Costs
Most budgets typically account for staffing, chemicals, and utilities. However, many communities tend to be less diligent about tracking other items, like maintenance and administrative costs. Generally, much of the daily maintenance is done by the pool staff, but it is also often performed by borrowed maintenance staff from other shared departments. In the latter case, the time is often not tracked.
Staffing Budgets
By far, the most significant expenditure is staffing. The cost can also vary considerably from one community to the next, and can be affected greatly by managerial decisions. Questions over what level of staffing to maintain are plaguing facility operators across the country. A manager’s responsibility is to serve the community and safeguard the guests. Some managers are focused on staffing efficiency—keeping operating expenses under control—while others focus more on the side of guest safety, which requires maintaining higher staffing levels.
In my studies, the expense for staffing averages around 55 percent to 60 percent of the total expenses budget. An interesting note is that this percentage ratio appears to be consistent across all facilities, whether an older, traditional pool in a smaller community or a newer community water park in a large community.
Regardless of one’s managerial philosophy, there is a base level required to staff the counters and keep the facility safe. But beyond the base level, staffing should be somewhat dependent upon attendance. Higher attendance should also mean a higher level of staffing, while lesser attendance should be matched with less staffing. I took the cost spent on staffing and divided it by the amount of attendance; the average ratio was approximately $3.50 of staffing expense per attendee. The communities that recovered their expenses averaged closer to $2.50 of staffing expense per attendee
Utilities And Chemicals
Chemical and utility costs are two other line items that are most often accounted for in facility budgets.
Utility costs are reasonably fixed and are more predictable in most outdoor facilities. The main expenditures generally include the cost of electricity, water, and gas. Electrical expenses can be calculated by multiplying the electrical demand for the equipment by the unit cost for electricity. The variable portion is estimating the amount of time the equipment is running throughout the day. Filter pumps should run 24 hours a day, while other equipment and lights are operated in alliance with the open hours of the facility.
For water use, I would normally expect a facility to use an amount comparable to the initial pool-fill volume—typically two to three times. For example, if a facility takes 100,000 gallons to fill, I would expect the total seasonal use to be 200,000 to 300,000 gallons. If more is used, that is a good indicator that a facility is losing water somewhere.
Estimating the utility cost of a pool heater is the most challenging task. The usage cost is highly dependent upon weather conditions and the preferences of the operator.
Chemical budgets can also vary substantially by weather conditions, attendance, and operator choices, such as the chemical type, the chemical levels maintained, and the level at which the swimming pool water is stabilized.
Studies have found that facilities typically spend 5 to 15 percent of their expense budget on utilities, and 5 to 10 percent on pool chemicals. Older, traditional pools tend to spend less money overall on utilities and chemicals; however, the chemical expense tends to be a higher percentage of the budget. Study results indicate that a traditional pool will average 8 percent of its expense budget on pool chemicals, while a community water park will spend an average of 5 percent.
With respect to utilities, modern aquatic centers and community water parks have substantially more equipment to operate, so they devote more money and also a high percentage of their budget when compared with traditional pools. My studies indicate that traditional pools dedicate less than 10 percent of their budget on utilities, while modern aquatic centers and community water parks utilize 12 percent or more of their budget.
Benchmarking
For a greater understanding of a budget, consider conducting a study to compare operating conditions with those of other centers. The process should include comparing conditions with other facilities that are similar in character, and located in communities that have similar demographic conditions. This process, called “benchmarking,” also helps to make a comparison of “market” conditions, comparing the impact of other competing facilities.
Many communities readily share this information, but also have staffs that are very busy. Therefore, this can be a time-intensive process in trying to get relevant information. You can get help from consultants with this process. In the end, not all communities operate their facilities the same way, nor do they have the same conditions. But understanding the operating conditions and making comparison to those of others can be very beneficial.
Jeff Bartley, PE, LEED AP, Principal of Waters Edge Aquatic Design, has over 20 years of experience in the aquatic consulting field. He takes great pride in directing all aspects of planning, design, construction administration, and operator training of aquatic facilities. He utilizes his master’s degree in engineering and technical knowledge to design tailored, energy-efficient, and sustainable aquatic facilities that optimize site and budget demands. Reach him at jbartley@wedesignpools.com or (913) 438-4338.