Oct. 4 Ballot Issue


“The City of Skagway has completed the feasibility study for the construction and operation of a swimming pool per the October 2, 2001 advisory proposition. The estimated cost of the construction of the pool is $6 million. The estimated annual operating cost is $350,000. The estimated annual revenue from pool users is $80,000, leaving an annual operating deficit of $270,000. Construction of the pool would be funded through sales tax and grants. Funding of the operational deficit could be through property tax, sales tax, or a combination thereof.

Should the City proceed with the design, construction and operation of a swimming pool in Skagway?
Yes No

Should the City fund the annual operating deficit of a swimming pool out of property taxes?
Yes No

Should the City fund the annual operating deficit of a swimming pool out of a combination of sales tax and property tax?
Yes No

Should the City prepare a ballot proposition to increase sales tax from 4% to 5% to fund construction and operation of a swimming pool?”
Yes No

Vital pool information based on the consultant’s presentation
The pool would be located in the lot adjacent to Skagway Recreation Center, and would be built with a joint entryway for both buildings. Consultant Richard Ritter drew up a aquatics center that is about 12,000 square feet. The main pool is 30 feet long and four lanes wide, with a 8 to 10-foot deep end. The center would also house a water slide, a “lazy river,” a hot tub, a wading pool and a sauna, but no diving board. Admission fees are presented at $2 per adult. And the pool would likely need about 10-15 staff members — mainly lifeguards.

Estimated cost of the pool $6 million
Construction $4.5 million ($3.5 million of that would go to construction of the aquatics portion of the building)
Indirect costs (permits, design, engineering, etc.) $1.3 million

Total operating cost of the pool: $350,000
Salaries: $160,000
Utilities: $150,000
Repair and Maintenance: $10,000
Additional expenses: $30,000
Projected revenues (based on 3,500 visits per month) $80,0000
Operating deficit: $270,000


Pro Pool Viewpoint

As the community of Skagway prioritizes projects like flood control, the clinic, the recreation center, and Seven Pastures, it becomes clear that our focus is honed to improving our “quality of life.” This movement is a credit to the civic-mindedness of our citizens and something to take great pride in. It is certainly very affordable and sustainable here in Skagway.
Providing Skagway’s population with a swimming pool would be a step toward an even healthier and more vibrant community. It is important for our own health, and those interested in settling here, that we develop options which combat the tendency toward inactivity brought on by winter conditions. Health problems associated with inactivity include depression, diabetes, obesity, heart conditions, and more.
Already, the recreation center has experienced phenomenal success. Last winter 175 to 200 individuals and families maintained memberships. In the last year, the center has seen over 20,000 visits from members and guests. Few facilities provide service to such a diverse representation of the community, and the center has managed to fund over 40 percent of its operation costs. Stop if you will, and imagine the addition of a pool to this thriving facility? Already a place for neighbors to come together, adults would use the pool for therapy, water aerobics and lap swims. Our children, seeking wintertime after-school activities would find a safe place to hang out, having too much fun to realize they are also building healthy bodies, and responsible social skills. Kayaking lessons, swim team, water safety classes, and swim lessons, would bring people from all walks together in healthy activity, all year round. A pool built to the specifications of the McDowell Report would make this happen for all of us.
It will cost a lot to build and operate this pool, and a sales tax offers the most affordable means. In 2004 over 95 percent of sales tax revenues were collected in the second and third quarters. Niney percent of our sales tax is paid for by visitors and seasonal workers. Still, we are not unfairly taxing these groups. Seasonal workers will surely benefit from and appreciate the pool. Tourists are currently paying a 6 percent sales tax in Ketchikan, 5 percent in Juneau and 6 percent in Sitka. At home, many visitors pay a 7 or 8 percent sales tax. Using the McDowell estimates, it would require about $270,000 from the city to operate the pool, and about $390,000 to finance its construction (based on a 30 year bond for $6.5 million at 4 1/4 percent). A 5 percent sales tax might generate an additional $1,175,000 or even more for our budget. This means that if we build the pool at its projected cost, we should have close to $600,000 left to buy down the mill rate (as much as 2 mills), or for other capital projects. While there are no guarantees, it is logical to conclude we could have a pool paid for by a fair sales tax and reduce our property taxes at the same time.
Please vote for this pool, and a sales tax to pay for it.
Bruce Weber, Citizens for a Pool

Con Pool Viewpoint

On the Oct. 4 ballot, residents will be asked to answer an advisory question regarding construction and operation of a city swimming pool. The Aug. 12 Skagway News states, “The price tag for constructing the pool is estimated to be $6 million, and the operating cost to be $350,000. The city expects to generate $80,000 in user fees, leaving an annual operating deficit of $270,000.”
I was on Council in the 1980s when the question of a pool was considered. During that period the cost was estimated to be $1 million. After a financial feasibility study it was determined Skagway, with its small population, could not afford the cost. In January 2002 David Moore, an architect and engineer with experience in the design and construction of swimming pools in Alaska, told the News, “I don’t think Skagway with its small population by itself can support this.” The cost at that time, I believe, was $2 million. Now, the question of a pool with a cost of $6 million has arisen.
I attended a recent meeting and asked, “How does city government plan to finance the proposed pool?” The city manager, the mayor, nor any council member gave a satisfactory answer. At this point it seems the council does not have a plan. One member said maybe they could use bonds. I do not believe they understand what the true cost will be. What is not being said is there is a cost for bonding, and there will be inflation in the cost of operation, and these costs will be substantial.
That pool at a cost of $6 million financed at 4 percent for bonds over 20 years will cost $8,726,000. The annual operating cost beginning at $350,000 and increasing at 3 percent per year inflation will increase to $383,000 in the fifth year and $443,000 in the 10th year. The cost of repayment plus operating will average over time to be $889,000 per year, $74,000 per month. For comparison, the FY06 sales tax budget shows school formula funding to be $868,778. This pool will cost more. The combined operating budgets of the Rec. Center, tourism, school food program, SDC, library, and parks and rec. total $891,524. The pool will cost almost as much as all these programs.
Some may question my analysis so I gave the estimated costs to a financial advisor. He returned a nine-page financial analysis which confirms my figures. We are within $17 for total repayment and within $2 for annual repayment plus operating cost. Thus, my analysis is correct. Also I conferred with a bond counselor to get the interest rate that the city would most likely pay. The counselor advised that 4 percent interest may be low because interest rates are expected to rise. Again, my analysis is correct.
The Aug. 12 Skagway News quotes Councilmember Monica Carlson as saying, “I tend to think $6 million, in my opinion, is too much for a swimming pool in this community.” I agree with Councilmember Carlson that $6 million is too much for a swimming pool in a community with our small population.
Ed Fairbanks