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HomeMy WebLinkAboutItem 8.1 - 2312 The Wave Waterpark Update Page 1 of 4 STAFF REPORT CITY COUNCIL DATE: December 4, 2018 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Update on The Wave Operations Prepared by: La Shawn Butler, Parks and Community Services Direc tor EXECUTIVE SUMMARY: The City Council will receive an update on The Wave's second operational season. STAFF RECOMMENDATION: Receive report and provide direction. FINANCIAL IMPACT: There is no financial impact associated with this item. Any sugges ted expense reductions to The Wave will be factored into the 2019-2020 Fiscal Year budget update. DESCRIPTION: The City broke ground on The Wave at Emerald Glen Park in March 2015 and the facility opened to the public on May 27, 2017. The facility repla ced the outdated Dublin Swim Center from which the City ceased operations in December 2016. The Wave’s modern amenities include a natatorium; outdoor sports pool; a waterpark featuring six waterslides, a splash zone for children, boardwalk, deck, cabanas, and picnic tables; and a community room. For summer season 2018, a concession stand was constructed within the waterpark to enhance the customer experience. The facility has been a regional draw that attracts visitors from not only Alameda County, but surrounding counties as well. At the September 4, 2018 City Council meeting, Staff was asked to provide a financial report on The Wave, an update on the success of the annual pass program and engage in a broader discussion about the fiscal sustainability of The Wave and its subsidy. Financial Report The Wave operates year-round, seven days a week and up to 14 hours a day (excluding holidays). In addition to the summer waterpark operations, The Wave includes year-round operations such as swim lessons, recreational and lap swim, Page 2 of 4 special events, birthday parties and rental activities. Of the approximate $2.9 million in budgeted expenses, 83 percent of the expenses are budgeted in part time staffing costs ($1.29 million), utilities and operating supplies ($1.1 million). In closing the books for Fiscal Year 2017-2018, actual year-end shows The Wave came in under budget on both revenues and expenditures for a total subsidy of approximately $950,000. Fiscal Year 2017-18 Adopted Budget Year-End Actuals Revenue $1,785,113 $1,670,143 Expenditures $2,877,750 $2,618,799 GF Support $1,092,637 $948,656 Approximately half of the revenue comes from waterpark operations. The Wave waterpark season (or summer season) is a roughly 15 -week period between the Memorial Day and Labor Day holidays and is the facility’s busiest time of year. The waterslides, natatorium and outdoor pools were open daily, as well as the concession operation, which began this year. Attendance Average daily attendance reached up to over 750 Fridays through Sundays, and holidays. However, comparing to 2017 Summer season the attendance is down by 26%. The summer 2017 average attendance was 978. The data shows that during the summer weekend and holidays average attendance was consisten tly more than double weekday average attendance, with the lowest day attendance Monday through Wednesday. As expected, attendance is directly related to weather temperatures; doubling on days when temperatures are higher. For example, in 2018, average attendance on Saturdays during temperatures of 70 -79 degrees was approximately 430, compared to an average attendance of approximately 900 during temperatures above 90 degrees. When looking at daily revenues, data shows that, in line with attendance, revenu e is highest Fridays through Sundays and holidays, and is lowest on Mondays. Lastly the data show the greatest revenue generating hours for the summer season are between 11:00 AM to 3:00 PM. Comparison with Other Cities In addition to reviewing the operation’s past two summer attendance numbers, programs, services and activities offered year-round, Staff also benchmarked our operation against surrounding cities that have been in operation beyond five years to take advantage of their learned knowledge. In looking at the greatest revenue generating hours and comparing our services operating hours to cities with well-established programming, Staff concluded that our summer operation hours for the Water Park is ideal and that half -day pricing is not a deterring factor. Page 3 of 4 CITY OFF SEASON MON-THU OFF SEASON FRI-SUN SUMMER MON-THU SUMMER FRI-SUN Fremont Closed Closed 11:00 AM–4:00 PM 11:00 AM-5:00 PM Antioch Closed Closed 11:00 AM-6:00 PM (4:00 – 7:00 PM on M-F, August 6- 17, 24, 31) 11:00 AM-6:00 PM (4:00 – 7:00 PM on M-F, August 6-17, 24, 31) Newark Center opens intermittently throughout day Fri. 5:00-8:00 PM Sat. 12:30-6:30 PM Sun. 12:30-5:30 PM Intermittent Schedule for Rec/Lap/ Fitness 12:30 – 4:30 PM Intermittent Schedule for Rec/Lap/ Fitness Fri. 12:30 – 8:00 PM Sat. 12:30 – 6:30 PM Sun. 12:30-5:30 PM San Ramon Lap Swim 6:30 AM-8:30 PM runs intermittently Lap Swim 6:30 AM-2:30 runs intermittently 12:30-3:30 PM & 7:00-8:30 pm 12:30 – 4:30 PM Annual Pass Program and Military Pricing This past waterpark season, the City implemented an annual pass program for Dublin residents. The pass allowed entry Monday – Thursday throughout the season for $85. The City sold 114 passes this past season. Staff would recommend continuing the season pass in its current form. It is also noteworthy to mention that we were able to provide 850 military ticket discounts that past Summer season. Sustainability Discussion/Cost Savings Options Having two summer seasons and an entire fiscal year accounted for, Staff is now able present an accurate picture of ongoing revenues, expenses and subsidy needs for the facility. Waterpark operations are, by in large, a self -sustaining and marginally profitable enterprise. The vast majority of the subsidized expenses for this facility are for its year- round operations for community programming, such as swim lessons, recreational swim, lap swim and water exercise programs. Previously at the Dublin Swim Center, these programs were not offered year-round, but that operation did require an annual subsidy of around $300,000. The table below shows revenues and expenditures for the past 2017 -2018 summer seasons as well as the Dublin Swim Center’s last year of operation. Expenditures Revenues Subsidy Dublin Swim Center 2016 $547,803 $252,317 - $295,486 Wave Summer Season 2018 $796,141 $852,213 + $56,072 Should the City Council wish to see a reduction in the overall subsidy for the facility, Staff would recommend review and changes in three areas – utility cost, part-time staffing and contracted services. Page 4 of 4 First, Staff recommends tackling the ongoing electricity costs for the facility by installing solar panels at or near the facility to offset the approximate $180,000 in annual costs for that service. Additionally, Staff would recommend a review and reduction of part time staffing, which is the largest portion (and variable) related to operational expenses. Of course, any major reductions in part-time staffing would result in changes to operational hours. Any of these types of major changes would also be analyzed to review the impact to potential revenue. Lastly, Staff would evaluate its contracted services for the facility and recommend reductions to some current professional services contracts. Further, the City could evaluate whether certain programs and services, such as swim lessons and concessions would be beneficial to contract out. Staff is seeking direction on the above items. STRATEGIC PLAN INITIATIVE: Strategy 1: Assure the City’s long-term financial sustainability. NOTICING REQUIREMENTS/PUBLIC OUTREACH: N/A ATTACHMENTS: None.