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Quick jump:
* Pool
* Golf course

Why the city may cut swim center and chop golf course
EVERETT — Residents have expressed outrage the past few weeks at options cutting public services to reduce the growing structural deficit within the city’s operating budget. 
Closing the Forest Park Swim Center and reducing the size of Walter E. Hall Golf Course are the two items holding most of the public’s attention.
When some residents attending public input meetings earlier this month saw that the city would be saving $410,000 a year by closing the Forest Park Swim Center, many wondered why it was an option being considered for study to relieve the growing deficit in the city’s general fund.
“This is just a drop in the bucket,” resident Pam Kepford said at the second public input meeting. “I’m more interested in ways that can save the city millions.”
The city’s budget deficit is projected to grow to $21 million by 2018 if the city does not make any changes. The list that includes closing Forest Park Swim Center is simply a list of brainstormed options for the city to consider studying further.
Mayor Ray Stephanson will share his recommendations on what changes to make at the June 4 City Council meeting. 

Why Forest Park Swim Center is on the list
Like many of those attending the public input meeting a couple of weeks ago, Kepford swims at the pool regularly. She appreciates that the pool is designed for swimming, unlike larger local centers that have incorporated lazy rivers and slides into their pool.
It costs more than $410,000 per year to run the pool, according to city parks director Paul Kaftanski. The projected $410,000 savings comes from the difference between expenditures and revenues generated by people paying to enter the pool or to enroll in classes.
“Our customers do help defray the cost of running the pool,” Kaftanski said.
But this is only part of the pool’s expenses. Since the pool is 38 years old, some of the equipment is getting old enough that it will need to be replaced, and it is difficult to find some of the components for such an old system.
  “If the pool stayed open, we need to recognize that in the future, it’s not just the operating costs, it’s the capital cost that we need to be aware of,” Kaftanski said.
The roof will need to be replaced soon, which will likely cost more than $100,000. Parks would also prefer to optimize the restroom and changing room.
Since 2008, open swim attendance has declined from 81,000 to 60,000, a decline of 26 percent.
During that time period, Forest Park Swim Center faced new competition from Lynnwood’s heavily renovated pool and more recently from the brand-new Snohomish Aquatic Center.
However, class and program attendance has actually increased by 15 percent, from 65,000 to 75,000. Preschool and beginning swim lessons are the most popular classes at Forest Park.
Additionally, the city has seen their cost recovery increase from 47 percent to 53 percent, meaning that over half of their operating costs are now covered by fees paid by pool patrons.
“When you compare our situation to other municipal pools, we’re doing a fairly good job,” Kaftanski said.
Ultimately, it is up to the city council to decide if the pool stays open. But after the outpouring of citizens supporting the pool at the meetings, Kaftanski emphasized that the parks department heard the community’s support.
“Our job is to make the economics work and we will try to keep everything as cost-effective as possible,” he said.
Fee increases consistently happened from 2008 to 2013. Should the pool remain open, additional adjustments will likely occur, but as Kaftanski put it, this process is more of an art than a science.
“We have to be careful of charging a fee that is so high that it drives people away,” he said. “We want to generate revenue without losing our customers.”
  If the Forest Park Swim Center were to charge as much as the Snohomish Aquatic Center, which charges adults $5.50 for a day of swimming, residents might instead drive to Snohomish since that pool has slides, a lazy river and a surf simulation machine, he said.
Everett charges adults $3.75 to swim at Forest Park, which is about average to other municipal pools in Snohomish County.

Why Walter E. Hall Golf Course is on the list
  Many golfers support maintaining the current size of the Walter E. Hall Golf Course.
The city’s brainstorming list includes shrinking the 130-acre Walter E. Hall Golf Course into an 18-hole, roughly 100-acre “executive course” with less lengthy course sizes and smaller par numbers. The extra land freed up from the reconfiguration would be sold to raise cash.
Walter E. Hall got on the list ironically because of a huge debt incurred from the late ‘90s remodel of American Legion Golf Course.
The city’s golf division is autonomously operated outside of the central city budget. Just like how Everett Transit has to manage paying for its operations without city support, the city’s public golf courses do, too.
The golf division currently holds a $7.3 million debt to the city. In 1997, the city sold $6 million in bonds to remodel American Legion Golf Course. In 1998, an additional $1.7 million bond was issued to build a new clubhouse. Both of these bonds had 20-year terms. The first had an interest rate of 5.15 percent and the second had an interest rate of 4.69 percent.
The city, healthy with cash in 2007, called the bonds early – essentially buying the bonds into the city general fund – and that extended the repayment terms by 33 years. 
Both bond issues were sold with 10 years of call protection. Repayment terms called for interest-only payments for the first five years then stepped up principal payments thereafter. But after the first five years, the city’s golf income began to fall short and its fund balance was consumed.
On top of this, in the mid-2000s, the golf division was running at an operating deficit.
The golf division then borrowed from the general fund to make up operating deficits.
By the time a new business strategy was implemented in 2007 to increase income and decrease operating costs, the debt stood at about $7.9 million.
At this time, the interest is around 2 percent, but the rate varies depending on the city’s portfolio yield each month.
No additional inter-fund loans have been issued to golf since March 2009.
Even though the debt exists because of work to the American Legion course, the golf division exists as a single item within the city’s budget, so selling 30 acres of Walter E. Hall’s 130-acre course will help pay off the debt. 
Since the golf division is in debt, any money it makes goes into the debt and, on paper, the division still appears in the red. If the city can pay off the division’s debt, the money that the golf system makes can go into maintaining the courses and the golf division will not appear as a large burden on the city’s budget.
Golfers protested ideas that the course would be shortened and reconfigured into an executive course.


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