MONTPELIER — A presentation about two versions of a recreational complex that would both lose money, even before factoring in the hefty debt service associated with actually building them, prompted an “excuse me” moment that had some city councilors and at least one resident scratching their heads Wednesday night.
Councilor Tim Heney was responsible for politely interrupting consultant Ken Ballard as he was responding to observations his projections involving operational expenses and revenues don’t reflect the significant cost of construction and concern some of his revenue estimates weren’t rooted in reality.
“I know the numbers look large and daunting, but we feel like it’s realistic for what you have in this facility,” explained Ballard, who said his “conservative” estimates were based on either an 85,500-square-foot recreational complex, or one that is 16,000 square feet larger and would include an indoor pool.
What they don’t reflect is the cost of building them.
Enter Heney, who had already questioned Ballard’s assumptions about seasonal usage and that the facility — pool or no pool — would regularly draw people from a 450-mile “secondary service area” that stretches from Worcester to Williamstown and includes the Mad River Valley.
“Excuse me, where are we going with this?” Heney asked. “Everybody’s looking down. … What’s going on here?”
Mayor Jack McCullough explained the council was hearing the presentation it paid for and when that was over it would discuss “next steps.”
Heney sounded beyond ready for that conversation.
“Are we there now?” he replied.
But after Councilor Dona Bate declared the recently completed study a good “tool for future discussions,” North Street resident Steve Sease said he wasn’t so sure.
A remote participant Wednesday night, Sease said he was as puzzled as Heney.
“I really wonder what are we doing?” he asked. “We’re talking about a recreation center that’s going to cost tens of millions of dollars (and) the city, if it was a person, would say: ‘We’re just about broke.’”
Sease was just warming up.
“We’re facing incredibly daunting financial challenges of really exceeding priority, ranging from our city water and street system, to recovery from the flood,” he said, citing sobering estimates just released by school officials that suggest those who own property in Montpelier could face profound tax increases in coming years.
“The city is … facing some really tough financial times and I honestly don’t think it makes any sense for us to be talking about ‘operational costs and revenues’ of a facility that, frankly, it just seems really unrealistic for the city to consider going forward with,” Sease said.
That seemed to be the prevailing view even before Heney interjected, and not just because the estimated cost of operating either version of the hypothetical recreation center would exceed projected revenues.
Ballard told councilors a pool-free facility — one that would still have plenty of amenities and be dominated by large gymnasium and indoor turf areas — would almost break even in its second year. Based on Ballard’s projections, the cost of operating the facility would be roughly $2.3 million and it would bring in about $2.25 million in revenue — a shortfall of just over $52,000.
The costs would go up to nearly $3.55 million if the city were to add the pool, and while the revenue — $3.15 million — would increase as well, Ballard said the operating shortfall would swell to more than $395,000.
None of those numbers reflect debt service associated with the bond that would be needed to finance the project at a time when Councilor Sal Alfano noted construction costs are running in excess of $500 a square foot.
Based on the size of the facilities Ballard proposed, Alfano said that would put the cost of construction in the $44- to $50-million range. Both numbers, in his view, appeared to be “completely out of the question.”
“I would need to have a lot more information to be able to calculate how that would be feasible by any stretch of the imagination,” he said.
Ballard said that was a question for the city’s architect. His focus, he explained, was on the operations of the facility once it is built.
Recreation Director Arne McMullen said the 80,000-square-foot footprint with the option of adding an indoor pool reflect the “dream” scenario as a springboard for a discussion City Manager Bill Fraser said may eventually involve regional partners.
Fraser described the report was a starting point for a conversation that could go in any number of directions.
“This is definitely the beginning of the process, it’s not the end,” he said.
Heney said the report — one that will have to be modified if the facility it contemplates is significantly scaled down — was premature.
“I just can’t believe we paid a consultant to generate this information,” he said, noting the location of some future facility is far from a settled question, and there are alternatives to a massive city-run complex, including using gym space that exists in three local schools, hadn’t been fully explored.
McCullough defended the exercise based on the condition and limitations of the city’s recreation center on Barre Street.
“I think it’s fair to be looking at this,” he said. “The recreation center the way it is now is not adequate to meet the community’s needs.”
With respect to next steps, McCullough suggested more “community engagement” was needed.
