The uneconomical mind

A rash acquiescience in the request of a departing commissioner to take on his committee assignments left me on the governing board of the county's only public swimming pool. It seems a nice pool, run by nice people. It gets a bit of financial support from the county, a fixed amount, while the city traditionally has covered losses in an informally open-ended way.

The year of COVID was hard on public pools. The pool closed for a while, then creaked back into action last summer under a hideous set of regulations that required selling visitors 90-minute blocks of time, separated by 30-minute whirlwind cleaning regimens. (The idea that COVID primarily spreads via contaminated surfaces, even in an outdoor facility dominated by chlorinated water, dies hard.) This was the state of affairs at the last meeting I attended, in May 2020. I'd been wondering somewhat guiltily if I'd managed to miss notices of any meetings since then, in person or by ZOOM, when I received a notice of a meeting yesterday.

In the eleven intervening months, the pool had managed to stay open all winter, a feat that required expensive heating. I admire their grit and their commitment to a small but avid public, but their operating deficit was about 20% of budget. Now, my role on the board is to represent the county's interests, and the county has no intention of increasing its fixed subsidy--much to the apparent disappointment of the pool managers. So a pool deficit is not a personal problem for me. I did, however, ask what their plan was, only to receive somewhat blank stares. Plan? None of this was their fault. What did I mean, plan?

Well, I asked, just as a practical matter, have you got cash reserves that will allow you to keep paying the bills when you operate in the red? Oh, no, the city simply picks up the slack. OK, then, if the city is willing to subsidize you infinitely, then I guess it's a problem for the city, not the pool, certainly not me.

Well, said the city representative on the board thoughtfully, it's not quite true that the city is infinitely generous and patient. In fact, the city's financial situation is a bit on the desperate side, too. OK, then, I said, back to the question: what to do about your operating deficit? Again we had to wade through the issue that they didn't feel the extraordinary circumstances were their fault. For instance, the state health department dumped an entirely new set of quite expensive operating guidelines on them in January, after promising--promising--they'd never do that. Yes, that's very bad, so what to do now? I have an idea: can you raise the rates you charge your customers so that they're adequate to cover your costs?

This notion struck like a bolt out of the blue. After all, the circumstances aren't the public's fault, either. There followed a long discussion in which they argued that raising rates a modest amount would contribute only quite modestly to the bottom line. My point of view was that any black ink was a least a little better than merely breaking even and much better than red ink. They tried arguing that some customers made a convincing case that they deserved a discount, because they needed the pool for their health. No problem, except that if you want to operate as a charity, you'll need a donor, and it sounds like the city isn't feeling infinitely charitable. Also, your "Friends of the Pool" fundraising partner just announced they were disbanding.

The pool managers argued that losing a little money on party rentals might bring in more individual customers because of the exposure. That's known as a loss-leader, I said, and it's definitely a marketing strategy, but where's your evidence that the loss-leader leads to more paying traffic and, in the end, break-even status overall? If you can't show that, you in classic "lose money on every transaction but make it up in volume" territory.

What about the risk, they protested, if we raise rates and our traffic dries up? Shouldn't we wait months for someone to complete a survey of competitive market rates in the tri-county area? But that survey was begun months ago and is unlikely to include the results of the recent state regs driving up costs. The pool managers probably are going to have to bite the bullet, raise fees, and see how their customers react. Ultimately, if the market won't bear user fees sufficient to cover their costs, and they can't find a fairy godmother in the form of a philanthropist, grant administrator, or elected representative of taxpayers, they can't keep their doors open.  This suggestion elicited general stupefaction. (What do they teach them in these schools?)

As the chairman reached his informal one-hour limit for any meeting, the pool managers seemed almost willing to admit that they needed to revamp the fee structure for individual guests as well as party rentals. The problem was, fee-hike proposals weren't on yesterday's agenda and would need to be settled at the next meeting. When's the next meeting? September, after the summer season. I suggested that their by-laws probably allowed for a special meeting. How about a week from now? Can you come up with some numbers for what fees would put you back into the black? Anxiety, shuffling, confusion, grudging agreement.

I'll be curious to see whether the chairman calls a special meeting in a week or two to pass some increased user fees in time for the summer season.