Wednesday, November 9, 2011

Economy of scale?

I noted in today's SP (Nov. 9/11) that the city has increased rates for use of civic leisure facilities. The goal is to recapture 65% of the cost, starting Jan. 1/12 with daily rate of $8.30 and increasing annually by $.50 to 2015 at which time the daily rate will be $10.30.

The Leisure Services Manager states this cost is still at the lower end of the market rates. Not so if you add on the 35% the city taxpayer is contributing. Drop-in rates a private fitness centres seem to range between $7 to $15 and with that fee structure these private centres make a profit.

I know both the public and private sectors have monthly/yearly rates that are cheaper, but the city report is only dealing with the daily rate.

This poses two questions: 1) why wouldn't the city charge full recovery rates and 2) how can the private sector make a profit when their rates would be the same as the city's rates if the city charged full recovery?

I suspect the answer is the swimming pool component to the city facilities and I'm not aware any private centres that have this element. (Please correct me if I'm wrong.)

As for the taxpayer subsidizing the facilities, taxpayers have already done that through the capital contribution. Perhaps the operating costs of these facilities should be borne by the users through the rate structure.


  1. Do you have even the first idea about the foundational purpose of public provision of goods and services?

  2. I'd say a former City Councillor has a better idea than an Anonymous commenter on her blog?

    Or are you referring to your perverted idea of the foundational purposes? You know, the one that is not commonly accepted, nor applied, but for which you believe they should be based on.

    Guessing other than the voices in your head, no one knows what you are talking about.

  3. Anon 5:09
    What the hell are you on about? You really have no idea what you're talking about, do you?

  4. "the swimming pool component "

    Ding ding ding ding... we have a winner.

    Who is going to go swimming for $25/person?

    Pools are terribly expensive to operate. Where else do you find pools other than in publicly funded facilities?

    Hotels. And typically they are pretty small ones. The cost of that pool is built into the cost of the room, so essentially a "money pit (pool)" in the hotel is being "subsidized" by the profitable part of the hotel.


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