Proposal for Sedona Rec Center is too expensive
rec center site at the Posse Grounds
Note: Chevalier is the Chairman of Sedona’s Art and Culture
Commission. He is a retired Senior Executive of a major retailer
where he was responsible for law and personnel. He holds a
Degree in Government from Columbia College, a Law Degree from
Columbia Law School and Business Degrees from both Columbia
and Harvard Business Schools.
Soon the citizens of Sedona will have a chance to vote
on whether or not the proposed Sedona Indoor Recreation Center
is something we want and is something we believe the City
of Sedona (us) can afford to pay for at this time.
For at least a decade, our city government has been
hearing from citizens who want an indoor recreation center.
In response, and to find out the wishes and possible patronage
for an indoor recreation center, our city government initiated
both public meetings and two community-wide surveys. As a
result of that imput, the City requested a feasibility study.
In November, 2000, our city received the final feasibility
study report recommending a 46,310 square-foot Sedona Indoor
Recreation Center. This report was prepared by an experienced
architectural firm hired to study the issue.
According to the report, the proposed Center would be
open daily, year-round. It would be staffed by 6.25 full-time
employees and 770 hours a week of part-time employees (which
equals 19.25 full-time employees for a grand total of the
equivalent of 25.5 full-time employees). This would not be
a small operation.
• It would have
an AQUATICS ROOM with a 25-yard, 6-lane lap pool, and a separate
zero-depth entry leisure pool, which would have a 20-foot
high water slide. The lap pool also would have spectator
seating. In total, 14,600 square feet would be devoted to
the aquatic room, of which 1,200 square feet would be for
• It would have
a RECREATIONS PROGRAM SPACE, including a full basketball court,
two half basketball courts, and a volleyball court (total
8,600 square feet), an elevated indoor running track with
16 laps per mile (2,700 square feet), a fitness center (3,000
square feet), a dance/exercise room (1,200 square feet), and
two classrooms (1,800 square feet) for a total of 17,300 square
• It would have 800 square feet for short term CHILD
• Locker rooms would use 2,600 square feet of the Center,
• The LOBBY would be 2,500 square feet and restrooms
total 550 square feet,
• Vending, staff offices, elevators, stairs, storage
total 7,960 square feet.
on right: Proposed rec center site at the Posse Grounds
stated earlier, the total planned inside space of the proposed
Center would be 46,310 square feet.
This is a ambitious design and provides ample space
for many activities. In my opinion, the proposed Center contains
features that are not needed.
For example, the participants in the 1998 and 1999 indoor
recreation center surveys, sponsored by the City, showed little
interest in having day care. Day care is a high expense/low
revenue item according to the feasible study report. In the
1998 survey report only 10% of respondents said they would
like day care included. In the 1999 survey report, no figures
were made available about day care interest but it was not
listed as one of the top eight activities requested (only
the top eight were listed).
If the vast majority
of survey respondents showed little interest in having day
care as part of the recreation center, and it is a high expense
item, then why should we add this expense? I also believe
that the proposed reception/lobby area, which is planned to
be 2,500 square foot, is excessive in size. It provides no
recreation activities, and 2,500 square feet is costly to
build. I do not think we need a reception/lobby this big.
If you like the plan for the proposed Center, and if
you live in Sedona and choose to vote, the question you need
to decide next is whether or not it is prudent for the City
of Sedona (US) to take on the burden of the cost of building
and maintaining a center of this size and scope. The City
government tells us that the estimated cost of construction
of the proposed center is $8 Million and the estimated cost
of operation and maintenance of this center would be $885,000
The proposal we are voting on requires the City to pay
all but $1 Million of the $8 Million cost of the Center. Having
the City paying 7/8ths of the cost (or for that matter paying
any part of the cost) for this kind of facility is an abrupt
change for Sedona.
To the best of my knowledge, Sedona’s government has
not participated economically in such ventures in the past.
I have been told that our library, and currently the Garland
Teen Center, as well as all our art and cultural facilities,
were built (or are currently being built) solely with private
Frankly, I welcome the City’s change of heart, but I
question whether going from no economic participation to taking
on 87.5% of the financial burden is necessary or prudent for
our city at this time.
To have the money to pay for this center, Sedona would
have to assume a substantial amount of additional debt. If
the City cannot pay back this debt out of its normal stream
of revenue, then the City would have to borrow more money
or the Sedona taxpayers would be required to pay additional
taxes so that interest and principal on the debt is paid.
is the detail of the costs that we are being asked to approve:
The Indoor Recreation
Center proposal provides that the City (US) would pay Seven
of the Eight Million Dollars estimated as the cost of construction.
The City would provide $2.1 million up front. This money would
come from various City reserves plus the sale of 8.6 acres
of land along Soldier’s Pass Road. To raise the rest of the
money, estimated to be $4.9 Million, the City would obtain
a 20-year loan. If interest rates remains at the quoted current
level (5.2%) over the 20 year life of the loan, then the
City would pay approximately $400,000 a year in interest.
To maintain and
operate the building in 2003, the feasibility study report
estimates it would cost $885,000 and the City would be responsible
for all of it. I could find no cost projections for later
years. The feasibility study report projects that revenue
from membership, fees etc. would be $743,400 annually. The
report proposes that the membership rate for adult residents
(per person) be $4.50 a day, $30 a month or $250 a year.
Family membership (up to four members) for residents would
be $55 a month or $475 a year. Non-residents would pay more.
These rates compare vary favorably with the Sedona Racquet
Club and the Ridge Spa, but are higher than the Cottonwood
report projects that the Center would sell 950 annual admissions,
700 monthly admissions plus 66,500 daily admissions each year.
The report also estimates that 60% of daily users could be
non-residents. (Would Cottonwood residents come and pay the
higher fees for a better facility?) The City is relying on
these figures and calls them conservative in its indoor recreation
center newsletter update.
the projected annual Center income of $743,400 proves accurate,
then the amount the City would have to contribute to pay annual
maintenance and operating costs would be $141,600. The dollars
the City now spends to maintain the current outdoor pool owned
by the School district is $58,000. The City would no longer
pay this amount and would apply it against the $141,600. By
deducting this $58,000 from the total of $141,600 the City
would have an additional expense over what it is currently
paying of approximately $84,000 annually. (We are not told
how the School District plans to make up for this lost money.
Will homeowners be taxed more by the school district?)
The bottom line is that the City government estimates
that the annual cost for debt service and the operation and
maintenance of the indoor recreation center would be approximately
In deciding how to vote on this issue, I believe we
should understand that the actual costs of construction and
maintenance could be higher then the City has estimated due
to a variety of considerations that do not appear to be factored
into cost projections. For example:
• The projections of cost in the report are based on
construction of the center in the 2001 building season. No
money is factored in for inflation in 2002. (The report, which
was finished in 2000, did factor in $300,231 for inflation
• The projected debt interest rate of 5.2% for the loan
could rise sometime during the 20 years of the loan.
• If this center is approved, competitors may react
to compete for clients by upgrading their facilities or lowering
their fees to maintain their clients. For the Center, this
could result in a lower usage or lower fee charges then currently
• The feasibility study budget of $14,000 a year for
maintenance and repair would rise once the Center is outside
of the two-year new construction warranty period. The report
acknowledges this fact but makes no cost projections beyond
the first year of operation.
It is also possible that the actual cost of construction
could be lower if the 5% contingency for construction change
orders or other contingencies is not used. The city makes
note of this in its newsletter. On the other hand, a 5% contingency
may prove inadequate.
Leaving all these
concerns aside for the moment and using the City’s debt assumptions
for the Indoor Recreation Center, (an interest payment of
$400,000 a year and an additional $84,000 a year for operating
and maintenance cost), the question is: Where does the City
get the money to pay this debt?
The City has stated
that the money would come from Capital Improvement funds.
Currently, 20% of sales tax money is set aside for improvements
to city parks. I believe that amount is currently about $340,000
annually. As I understand it, the City’s position is that
this money would go for paying interest and principal on the
Indoor Recreation Center debt. If this happens, it appears
to me that there will be no money remaining in the budget
for other city park improvements. If this is true, then we
are creating one problem to help solve another.
To make matters
worse, the City would still have a short fall of $60,000 to
pay for interest on the Center loan even after using up all
the money that is set aside each year for park improvements.
This $60,000 shortfall would have to come from other sources,
as would the $84,000 needed for operations/maintenance of
the Center. In total, $144,000 annually would have to come
from other sources. “Other sources” means the City’s general
fund. And the general fund currently relies on sales and
bed tax for most of its income.
Are we putting
too much of the City of Sedona’s money into one idea? I think
I am concerned
that the indoor recreation center proposal we are being asked
to vote on would hurt our city more than it would help it.
Here are my concerns:
• Our City government has other worthy causes to help
support and we need to have sufficient money to do that.
• The City would add to the risk of not being able to
pay future debt with revenues from current sources. Let’s
not forget that Sedona still has a huge sewer debt of $63
• Our sales tax
is 9.3 or 9.4% depending on which county you buy in. That
is much higher than surrounding communities. Practically all
of us who live here are directly impacted by the sales tax.
If the City Council has a problem funding future debt, it
could decide to raise the sales tax again and that would negatively
affect us all.
• If the City Council needs to raise more money to pay
debts, and feels that the sales tax can not be raised higher,
it may decide that it has no choice but to add a City Property
These are serious concerns of mine. Yet, I believe that
an Indoor Recreation Center is an achievable idea. But, I
also believe in being prudent with taxpayers’ money. In my
opinion, the City of Sedona (which is US) does not have to
take on another huge debt burden to have an indoor recreation
center. There are at least two other ways for Sedona to build
an Indoor Recreation Center that would allow the City more
approach is to build the Indoor Recreation Center in stages
as my wife, Maggie, suggests. It would make more sense to
first build an Aquatics Center, which provides the lap pool
and leisure pool as described in the feasibility study. The
City surveys results indicate that an indoor aquatics complex
is the top priority of our citizens. So let’s make it our
city’s first indoor recreation center project.
The City could
first build the 14,600 square foot aquatics center and, as
cash becomes available in future years, expand the Center
for additional indoor sports and other activities. I do not
know what an aquatics center of 14,600 feet would cost and
I think the City financial participation should be limited
to the $2.1 million it expects to have available after selling
the acres described above.
If, on the other hand, the feeling of the majority of
the concerned citizens of our community is that we must have,
all at once, the indoor recreation center as described in
the feasibility study, then let’s wait until we have private
commitments to pay for substantially more than 1/8 of the
cost of construction of the center. I believe that with professional
fund raising help, the City may also find a major donor who
is interested in naming the center in return for generous
I believe that the City Council, if it wanted to, could
follow both of these approaches at the same time. Sedona could
build its Indoor Recreation Center in stages, beginning with
an aquatics center, while, at the same time and using professional
help, seek further financial aid from private donors, grants,
endowments as well as county money.
I strongly believe
that Sedona should have an indoor recreation center, but I
do not believe that to get it the City needs to add on another
$4.9 Million of debt and additional yearly expenses of $484,000
or perhaps even more. I will vote NO on the indoor recreation
center proposal as presently drafted.