These days, when Clay Shuck thinks about next year’s operating budget, he almost feels as if he’s waiting for the results of a biopsy: Will he live or die?

He’s got good reason to fear. This season money was so tight, Shuck had to reduce hours at all four outdoor aquatics facilities and cut a key staff position. But he may look back on 2009 as a fiscal dream. Next year, his city will be looking at a nightmarish $23 million shortfall, meaning even deeper cuts.

“It really feels like we’re on a roller coaster ride and we don’t know when it’s going to stop,” says Shuck, facility coordinator at Colorado Springs (Colo.) Parks, Recreation and Cultural Services. “There will definitely be some impact to the services that we offer the citizens of Colorado Springs, but we’re striving to do what’s best for our patrons and keep planning for the future.”

For Shuck and many other aquatic operators, that future is murky at best. As the economy all but ground to halt, aquatics has been left in the lurch. A generous $8 billion in federal stimulus money is available for public works, schools and parks, but aquatics projects were left out. In fact, the bill specifically forbids money to be used on swimming pools.

At the same time, the first-ever federal pool and spa safety law took effect. The Virginia Graeme Baker Pool and Spa Safety Act mandates new anti-entrapment drain covers and standards for public facilities. The law could not have come at a worse time because it forced facilities, many already teetering on the financial brink, to invest thousands in compliance. Many older facilities with existing hydraulic issues had even higher compliance costs, sometimes $100,000 or more.

Faced with deciding whether to keep police on the street or roads passable, community leaders are throwing in the aquatics towel. For years, many facilities have been the equivalent of a dirty little budgetary secret: They cost more to operate than they make. The red can run one-half million dollars a year or more. As the nation’s stock of approximately 300,000 public pools continues to age, that number has only grown due to increased maintenance and equipment problems in these aging pools.

Something had to give, and this summer in cities around the nation it did. Pools shut down. Finding out how many is an exercise in frustration because aquatics facilities are largely local entities and no central organization keeps track of such happenings.

But anecdotally, the impact was undeniable. Almost daily throughout the summer, news stories announced closures of pools and aquatics facilities that could no longer afford to operate. The list included the city of Worcester, Mass., which closed all eight of its municipal pools; the New York State Parks Department, which cut back swimming hours at numerous state parks, closed a number of pools and beaches and shortened the season at others; the Georgia Department of Natural Resources, which closed 11 state park pools; and the city of Parma, Ohio, which shut down one of its four pools. Other cities, such as Philadelphia, were forced to hold fund-raisers to open pools. Still other facilities around the nation cut staffs and/or reduced services and hours.

In case you missed it, there’s a message in all this carnage — the same message that makes Clay Shuck and many others like him feel so uneasy: Aquatics facilities must reinvent themselves or they will die.

“The pressure to become self-sustaining has become acute,” says Ken Ballard, founding partner of Ballard*King & Associates, based in Highlands Ranch, Colo. “If you can’t cover the costs of operating, you’re really at risk.”

Motivating factors

What’s behind the need for a change in the status quo? Industry professionals point to a number of factors, but ultimately it all comes down to tradition. Aquatics facilities long have been allowed to sustain losses, perhaps based simply on old conventions and a “that’s the way we’ve always done it” mentality.

In an autumn 2008 survey of approximately 615 Aquatics International readers, one-third reported operating their aquatics facilities with annual losses. In Rushford, Minn., administrators estimate that the pool loses approximately $20,000 annually. According to local media, the nearby city of St. Charles loses around $30,000 a year, and in Winona, Minn., the Bob Welch Aquatic Center reportedly runs an annual deficit of around $80,000.

“Yes, it’s costing us some money. But we know that upfront, and so we keep the pool open and let the youth and the adults enjoy it,” explains Windy Block, city administrator for Rushford.

Unfortunately for many communities, once-small losses have ballooned over the years. Pools require more planning and maintenance than a ball field or gymnasium, and many communities simply weren’t prepared for the costs, notes industry veteran Mick Nelson, facilities development director of USA Swimming, based in Colorado Springs, Colo.

“Chemicals, utilities, insurance and a few other necessities have increased way over that 3 percent [inflation rate],” Nelson says. “Also, many facilities never planned for capital repairs every three to five years, such as chemical feeders, pool heaters or pool refinishing.”

Compounding those challenges has been the growth of competition — fancy new waterparks, amusement parks, fitness clubs and parks have all upped the recreation ante.

Lynn Ledford is a partner in Cal Elite Kids, a private sports center operation in Rancho Santa Margarita, Calif., that offers everything from swimming to dance classes. A former attorney, she notes that when she first started, the concept of charging children for recreation often drew criticism. But today privately operated facilities such as hers are setting the gold standard for the industry.

Thanks to the advent of the private waterpark market, there’s an ever-expanding host of exciting water slides and interactive products designed to dazzle patrons who, as a rule, are savvy to what’s out there. More than any other time in history, today’s public demands more than just a water-filled hole in the ground.

“The expectation level from users has changed,” Ballard observes. To that end, a strong, family-focused recreation component is essential to draw today’s crowds.

“Most aquatic users are recreational users, and recreational use is the key to generating revenue to help cover operating costs,” says Mark Hatchel, the Irving, Texas-based vice president and senior project manager of Kimley-Horn and Associates.

When Spokane Valley, Wash., opened its three aquatics centers last summer, each featured a brand-new, recreation-focused amenity (a lazy river at Terrace View pool, a water slide at Park Road pool and a zero-depth entry leisure pool at Valley Mission pool) to enhance the existing facilities.

“Basically, with three ‘40-year-old bathtubs’ there wasn’t a lot that would attract kids when you look at the trends and all the slides and bells and whistles that are available now,” says Mike Stone, parks director. “This is our attempt to move closer to that.”

However, operators can no longer rely on recreational use alone. Circa 1984, it might have been as easy as “build a water slide and they will come,” says Claude Rogers, aquatic planner/designer at Water Technology in Beaver Dam, Wis. But that’s no longer the case. Growing interest in aquatic therapy and water fitness has brought new populations to the pool. With the expanded needs of the user group, modern facilities can no longer rely on recreation alone to bring in the crowds. Today it’s important to offer options to serve all potential user groups.

What it boils down to is this: Operators must respond to the needs and desires of the population, Hatchel suggests.

The business of aquatics

They also need to think about facilities in a whole new way. Experts say that means coming up with new cost-cutting measures and revenue-generation strategies. It also means thinking of the facility more as a business and less as a charity.

Ballard says his firm is seeing more and more new projects being planned from the beginning with the expectation that they will be financially sustainable. For existing facilities, he’s noted an uptick in the number of requests for operational audits.

“The public dollars are shrinking, but the expectation is there to maintain programming. So there’s a challenge to find a way to continue services,” Stone adds.

How can operators meet that challenge? It might seem like a no-brainer to simply raise prices to cover escalating costs, but given the expenses involved in running an aquatics facility, Stone says that’s not a solid solution on its own. To generate a profit, or at least cover operating expenses, operators in many communities would be forced to raise user fees so high that no one would be willing to pay. And lower-income patrons would be shut out, defeating the mandate that a public pool be accessible to all.

Thus it comes down to efficiency and a retooling of standard operating procedures to generate increased revenues and reduce expenses. “From an operational standpoint, it has to be run more like a business,” Rogers says. “Managers have to be able to cut costs.”

As executive officer for Oakland County (Mich.) Parks and Recreation, Dan Stencil knows all about the need to become more efficient. His county is one of the wealthiest in the nation, but in the last fiscal year, its parks and recreation department recorded a $100,000 deficit. Small figures, maybe, but large enough to set off warning bells.

Stencil says the agency had to undergo a major shift in operations in an effort to balance the books.

“It’s about being accountable to our taxpayers and government leaders, and doing it in the most efficient, effective way possible,” he says. “The whole foundation is the business approach.”

Starting last year, Stencil and his team refocused their priorities and began a major overhaul of the organization from the ground up. There’s a streamlined organizational chart, and a new focus on Oakland County’s two enviable waterparks that’s expected to bring the agency’s budget into line this year.

Money matters

A big part of any budget overhaul includes pricing. That may be difficult to accept because the idea of a community recreation facility is to provide opportunities that are affordable to everyone. But rather than wholesale price hikes, experts say pool operators need to consider overall pricing structure.

That means rethinking old pricing models, says Sue Nelson, aquatic program specialist at USA Swimming. Instead of charging based on comparative pricing, where fees are based on what the pool down the street charges, or traditional pricing — “the price is $XX because this is what we’ve always charged” — she suggests a different approach.

Nelson advises operators to emulate the public golf course model, in which users pay a membership fee along with additional charges for specific programs and services. Rates for a particular service or program should be determined based on how much that program or service costs to run. Operators need to know the total budget of their operation for the entire center, then develop a breakdown of how much each program needs to bring in to contribute its portion of expenses.

Another way to generate more revenue is by boosting attendance. Experts say even in high-traffic facilities it’s possible to draw in new users with creative programming. Stencil and his team are beginning to consider new programming options, such as water safety days and aquatic fitness. But that’s only a start.

Creative programming is all about attracting those niche populations. These might include swim team parents or local extreme athletes. Also keep in mind that baby boomers are aging so there’s a growing number of seniors, and a growing body of research supports the benefits of aquatic therapy for the sick or disabled. Those groups represent important demographics that could benefit from aquatics — and that means new programming opportunities which could generate needed income, says industry veteran Tom Saldarelli, chief operating officer of RehaMed International in Homestead, Fla.

To provide the widest mix of programming opportunities, Mick Nelson recommends that all new facilities include at least three separate bodies of water designed for various nonrecreational uses such as swim lessons, aquatic therapy, lap swimming, competition and aquatic fitness classes.

Operators with existing facilities that have only one pool still can target several diverse markets with careful planning, Nelson adds. He suggests creating a compromise with a water temperature of 84 degrees Fahrenheit. That should allow for the relative comfort of patrons of all ages in a range of programs.

And don’t forget about deck space. When there’s no more room in the water, some imaginative operators have begun planning programs that utilize deck space. For example, a 60- or 90-minute class that combines dryland stretching or yoga with water aerobics could potentially overlap a 30-minute toddler swim lesson or the tail end of an aquatic therapy session.

The key to offering that kind of total aquatic programming is highly trained staff certified to perform multiple roles and responsibilities, Sue Nelson says.

“All ages and stages can use the pool, but staff must be qualified,” she says. “Now there’s much more training needed, such as risk management and health aspects.”

The customer comes first

One thing any operator can do to help increase patron usage is to focus on the user experience. That means understanding patrons, providing the services and amenities they want, and implementing proactive marketing and customer service.

“In the past, we always just assumed we knew what they wanted,” says Sue Wells, Oakland County Parks and Recreation’s manager of parks and recreation.

But that’s changed.

Now the agency is working to become much more proactive when it comes to potential users. It has begun gathering public opinion and is soliciting the public’s involvement in long-term planning for the waterparks. Wells says the agency also has created a patron e-mail list and is utilizing it for things such as surveys.

Given the competition, serious marketing and advertising efforts are critical, says Judith Leblein Josephs, founder/president of Judith Leblein Josephs Enterprises in Wayne, N.J.

That’s why Oakland County Parks and Recreation created a new marketing position. The new staff member will be expected to handle advertising, promotions and public relations efforts.

Nowadays, with information available at the click of a mouse, there are a number of avenues to make the public aware of what’s available — and operators should be utilizing all of them, Leblein Josephs notes. For tried-and-true advertising such as printed fliers and brochures, perhaps the most important factor is location: Get the material in front of the eyes that will respond. For example, consider posting notices along the walking trail in your community park. People on the trail are already users of local municipal recreation and also are likely to have at least a minimal interest in fitness.

Fortunately, new media — Web sites, e-mail blasts, mobile marketing and social media — can be ideal for marketing on a shoestring. “Selective e-mail blasts that are short, sweet and timed properly before an event or membership drive [offer] the best bang for the buck,” Leblein Josephs says. Also, Web sites and online registration tools should be kept current, and operators might consider adding blogs, photo slide shows, videos and the like.

Often the best marketing tool is old-fashioned word of mouth. The best way to get people talking is by tapping into what they want and creating a fun experience. A younger demographic seeking aquatic fitness, for example, might respond to programs and messages keyed to the latest movies or video games.

Perhaps the one thing patrons want to see more than anything else these days is a high-quality staff. That means paying attention to customer service basics such as greeting regular patrons by name, and making employee training and education a priority.

Sue Nelson says a knowledgeable staff is one of the top things people look for when evaluating a program. She adds that cross-training can help to ease programming expenses — one staff member may be able to instruct more than one type of program — and highlighting the training may help operators justify price increases to consumers.

Back to black

The bottom line, Rogers says, is that “operators need to develop well-rounded facilities, or a system of well-rounded facilities, that offer high-quality programming and state-of-the-art recreational attractions with provisions to renovate, or grow and expand to stay vibrant and prosperous in the community.”

The changes at Stencil’s agency are expected to right the balance sheets this year, but if making changes that streamline the operation isn’t enough, it may be time to consider a partnership approach. Indeed, given the desire for larger, more all-inclusive facilities, Ballard says more operators are moving toward joint aquatics projects.

Today’s partnerships are varied and may include organizations from hospitals and day spas to local unions or real estate agents. “Think of a business that thrives on your opposite schedule and see if that partnership can work, such as a ‘rainy day’ discount in the local theater for your members showing a membership card,” Leblein Josephs says. “In turn, you might get advertising on the big screen and movie passes as rewards for lifeguards.”

In the end, whatever combination of strategies it may take to get there, it appears operators who are financially solvent stand a good chance of remaining a vibrant part of their communities.

“We’ve seen that facilities that can break even or come out ahead have done well in spite of the economic downturn,” says Scot Hunsaker, chief operating officer of St. Louis-based Counsilman-Hunsaker. “The longer people take to react to change, the more difficulties they’re likely to face in the future.”