Discussion:
The City Council approved a Community Center membership fee increase as part of the 2017 Fee Schedule. The fee increase was effective on March 15th. At the time the City Council approved the fees, they viewed the initial increase as an introductory rate and directed staff to further evaluate the fees and determine a rate that would best reflect a fully completed Community Center.
Staff reviewed the process of how the March 15th rates came to be and further evaluated the fees of Community Centers comparable to Shakopee's. The March 15th increase was a 50% increase for family memberships and a 40% increase for all other memberships. The proforma completed during the feasibility study of the project had suggested a 70% increase for family and 25% increase for all other memberships in the first year.
The Community Center will be completed at the end of June and that is when all members, current and new, will first be able to experience the added amenities. The direction from the City Council when the fees were first being evaluated was to stay affordable yet competitive. The current rates are still affordable and competitive and they will help to build a strong membership base. It is important however to have the membership fees reflect the amenities that the community is getting for their fees.
Staff put together a proposal of rates that are more competitive with our surrounding comparable Community Centers and presented these rates to the Parks and Recreation Advisory Board (PRAB) on April 10, 2017. The proposed rates reflected the following increases over the current rates: 22% for family, 17% for adult, 30% for youth/senior/military and 50% for adult +1 (See Attachment A).
The PRAB had a lengthy discussion on the proposed rates and raised very good questions that the City Council should consider and offer feedback on. The questions included; What is the ultimate goal for our rates? Where do we ultimately want them to be? When do we want the rates to be there and how do we get there?
The PRAB felt that the family membership was too low, however until a goal is determined, they could not make a recommendation on the amount. The board also had a lengthy discussion on how much and when the fees should be
increased. A larger initial increase has benefits because the facility is new and the added amenities are now available, however a gradual increase also has benefits to retain existing members. The PRAB unanimously moved to recommend to the City Council that any rate increase should not be implemented until January of 2018. In addition to the reasons that staff had provided, the PRAB felt January is the time of year when more memberships would be sold due to New Year's resolutions rather than in July during the summer. Staff's additional recommendations for a January increase included:
- Current rate is an introductory rate meant to help build the membership base and from March 15-July no new amenities are available for these members.
- Rates should build trust in our members. Minimal increases were made in the past because there were no new amenities or services to offer. The completed Community Center will get the city caught up on amenities. Prices should be changes strategically so the rates do not outprice members to quickly.
- Community Center operations will changes and time is needed to give staff the ability to get used to the changes, work out hiccups, build staffing and manage operations to provide the best quality service possible.
- Fee changes require additional staff time to manage and track multiple membership packages and multiple monthly rate for members.
- Perception of the community.
Pool Membership
The City Council has also asked to see a separate membership fee for use of the pool. The PRAB discussed the concept of a separate pool membership. They then discussed other possible separate memberships that could include fitness center only or gyms only. The PRAB concluded that they did not feel that having a separate membership for different amenities would be desirable with all of the other amenities included in a membership, for example families would most likely want the pool and indoor playground, adults that swim would also use the fitness center or fitness classes. The PRAB moved to recommend that the city not offer specific amenity memberships.