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Palm Beach Daily News


The business plan for the proposed Palm Beach recreation center narrowly passed inspection Wednesday from the Recreation Advisory Commission.

The board voted 4-3 to approve the plan, which even with conservative projections shows the town saving money each year on what it costs to subsidize the center. But some board members questioned the projections for staffing levels, the number of fitness center passes to be sold and revenue from general programming.

Ken Ballard of Ballard, King & Associates of Highlands Ranch, Colo., the firm that prepared the business plan, projects that under conservative assumptions, the town would pay about $13,000 a year less to run the new recreation center compared to the existing center.

The town currently subsidizes the center for about $338,000 a year -- the center costs about $671,000 to operate and generates about $332,000.

"The main two sources of new projected revenues are coming out of pass sales and increased programming," Ballard said via Skype at the meeting.

The town plans to sell three-month, six-month and annual passes for the fitness center. Staff members also would sell interval "all-inclusive" passes that would include access to the fitness center, indoor gymnasium and basic fitness classes. Daily passes to the fitness center and gymnasium would be available as well.

Ballard's team estimates the town could sell 150 passes of mixed varieties -- which represents 3 percent of the households in Palm Beach -- and generate about $138,000.

"That's extremely conservative," Ballard said. "That's about the lowest number we've ever utilized for a scenario for a facility of this nature," he said speaking of the 3 percent assumption. "We strive to be as accurate as possible but also are conservative in our estimates to make sure that what we've brought forward is attainable and doable in the marketplace."

Of the estimated 150 passes sold, 35 would go to corporate members, meaning business professionals who work on the island. The rest would be to residents and their guests.

More participation?

The town makes about $328,000 a year on adult and youth participation in enrichment classes, after-school programs and summer camps. The other $4,000 a year in revenue comes from rentals, merchandise and concessions.

Recreation Director Beth Zickar estimates participation will increase with a new center. The business plan predicts increased participation will add about $117,000 to revenues. It also projects the town will receive an additional $26,000 from people contracting to use the facilities.

Recreation board members Khooshe Aiken and Alexandra Woodfield questioned those estimates.

"To me, that's a big number," Woodfield said of the $117,000. "Just because we have a new recreation center, do you really anticipate that there are going to be that many more children coming to summer programs or after-school programs?"

Zickar responded, "Yes, I do believe that we can meet that goal."

Ballard also said the increase could be realized.

"In terms of what you're making now and the amenities that are being proposed with the new center, that's not unrealistic," he said. "We're talking about adding a third in terms of additional revenue."

Pass projections

The business plan projects 60 percent of the 150 passes sold would be for annual passes, while 25 percent would be for six months and 15 percent for three months. The annual passes would generate about $78,000 while half-year passes would bring in about $23,000.

Resident Anne Pepper questioned that balance.

"This is an extremely seasonal town," she said. "I'm wondering why you put so many annual passes when it would seem logical that the six-month pass would be the more likely to be sold?"

Ballard said that in his experience working with other recreation centers around the country, he found that many people would buy an annual pass over a six-month pass because of the price break.

A six-month all-inclusive pass would cost an adult about $420 while the annual pass would be $600. Similarly, a six-month adult fitness center pass would cost $336 versus $480 for an annual pass.

The business plan now will go to the Town Council for review this month.

Zickar assured the board it's not a final plan. "It is a working document that will continue to develop as we move forward," she said.

-- akopf@ Twitter: @aleesekopf

The narrowly approved business plan for the proposed recreation center might have gone the other way had a different alternate member voted.

The Recreation Advisory Commission voted 4-3 Wednesday to approve the plan. Vice Chairman Matthew Smith was unavailable for the meeting but would have recused himself anyway due to concerns about a conflict of interest.

The 10-member board consists of seven regular voting members and three alternates.

In Smith's absence, town code gives Chairwoman Pam McIver power to call upon an alternate member. McIver chose Nick Coniglio, son of Mayor Gail Coniglio, over alternates John C. Hartz Jr. and Linda Wartow.

Some board members and residents questioned the selection.

"I thought it needed to be the senior alternate," member Leslie Wytrzes said.

Hartz and Wartow were appointed at the same time and are the most "senior" alternates, according to Lisa Walkowich, recreation department office manager.

But, Walkowich said, that's not the way the recreation board has "historically" chosen alternates.

"It has always been the policy on the commission ... the alternates rotate to give each alternate a chance to participate in meetings," she said. "That's how it has been for the 26 years I've been here."

Hartz voted during a meeting in November and Wartow voted in February, meaning Coniglio was next up. At the November meeting, Hartz voted against moving forward with the recreation center project. Wartow voted in favor of the plan in February and Coniglio typically has spoken in favor of the plan.

At the beginning of the meeting, McIver said she had no intention of changing the rotation. "Every alternate rotates in order," she said. "It is how we've done it previously."

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March 2, 2017


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