District56 Aquatics Center to receive almost $1 million operations subsidy in 2025 Elk Grove city budget
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| Elk Grove City Councilmember Kevin Spease urged scrutiny of consultants' findings, saying they frequently go sideways. | |
In a follow-up report on continuing operational problems at Elk Grove's District56 Aquatics Center from the city's community events manager, Lana Yoshimura, it was revealed that the subsidy for the next fiscal year is almost $1 million. The bleak news was delivered during a presentation at the Wednesday, May 22, Elk Grove City Council meeting.
During Yoshimura's Aquatics Center annual operations report at the February 14 city council meeting, several deficiencies that accounted for higher-than-expected operating costs were reported. District 3 City Councilmember Kevin Spease requested a more thorough follow-up report at that meeting.
Read about the February report here.
Yoshimura and Cosumnes Community Services District (CCSD) representative Mike Dobson said the higher-than-expected cost resulted from faulty assumptions made about the Aquatic Center in 2016. The CCSD is the city's contract operator of the swimming facilities.
Dobson said that when the 2016 city council approved the Aquatic Center, other cities' swimming facilities were used as a basis for subsidy projections. He noted that the city's consultant's initial assumptions did not consider inflation or projections for future costs.
"The initial, only one year was discussed as it related to what would be the subsidy," Dobson said. "The future years and the effect of inflation at that time wasn't presented from the Sports Management Group."
That group was the city's lead consultant on the Aquatic Center. Their report can be viewed here.
Not taking inflation into account revealed things like spiraling utility costs. Dobson reported that in January, pool gas heating provided by PG&E went from $15,276 in 2020 to $42,890 in January 2023 and down slightly in January 2024 to $37,164.
Notwithstanding the effects of the COVID-19 shutdown, Dobson admitted many revenue assumptions were unrealized. He pointed to unrealized collegiate revenues as an example.
"The reality of colleges coming to rent the pool is, the two most local colleges, UC Davis, UOP [Univeristy of the Pacific] that have swim teams or water polo teams, also currently have a pool," he said.
Regarding the city's proposed 2025 budget, the Aquatics Center is projecting a $996,366 subsidy. When approved, it would represent an increase of $160,366 from 224's subsidy.
Labor, electricity, pool chemicals, and PG&E gas heating are among the significant cost increases (see chart below). Several current and past mayors and city council members have accepted cash donations from PG&E.
During his questioning, Spease, who noted he does consulting work, indicated that for-hire consultants frequently make incorrect determinations but are long gone when things go astray. Spease urged the mayor, city council, and city staff to scrutinize consultants' findings.
"My lesson to all of us, let's, please challenge the assumptions of expert consultants because things can go sideways with time," he stated.
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Not surprised--faulty assumptions and a lack of staff expertise in real world business deals. But compared to the swimming hole boondoggle, the zoo is an epic disaster waiting to happen.
The operating Pro Forma for the zoo only forecasts the first five years of operation and attendance is forecast to drop about 30 percent by year five. The finance plan even admits that the zoo will need to rely on new exhibits and special events to close the revenue deficit.
But for now, I guess "faulty assumptions" is the go-to excuse for City Council boondoggles.
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