Source: ebbandflowphotography via flickr.
In 2010, Mayor Michael Bloomberg and his administration raised the fees for residents looking to use City-run recreational facilities, including ball fields and tennis courts, looking for a bump in revenue. According to an exhaustive report by the Independent Budget Office (IBO), the increased fees not only failed to increase revenue but drove down membership across the city.
The numbers laid out by the IBO starkly portray the failure of Bloomberg’s bet that increased membership fees would increase revenues. The City was projecting that increasing fees would lead to $6.3 million in extra revenue but in the end, they only ended up with $1.1 million in extra revenue and decreased athletic facility activity across the city. The IBO laid out the specifics:
• With considerably higher fees at the start of the 2011 tennis season, the number of adult seasonal tennis permits sold by the city fell from 12,774 in 2010 to 7,265 in 2012, a decline of 43 percent. Single-play permits fell 46 percent, from 23,512 to 12,755 over the same period.
• Despite the decline in the number of adult permits sold, there was an increase in revenue because fees doubled for these permits. The city collected a total of $2.1 million from the sale of adult, junior, and senior tennis permits in 2012, but the revenue fell $1.3 million short of the projected increase.
• The number of recreation center memberships sold in 2012 declined by 52 percent to 46,047 with the doubling of membership fees for adults and seniors at the start of the fiscal year.
• With the decline in memberships, recreation center revenue remained flat in 2012 at $4.8 million, about $4.0 million below the Bloomberg Administration’s expectations.
• Although the number of permits sold for ballfields also fell in 2012 in response to the rise in fees, the resulting increase in revenue exceeded expectations by nearly 5 percent.
The full IBO report, which you can read in detail by clicking here, presents the fascinating insight into how the fee increase, in their opinion, ultimately ran counter to Bloomberg’s much publicized health initiatives:
The parks department raised its fees for tennis permits, recreation center memberships, and the use of ballfields as part of a citywide effort to close projected budget shortfalls. While anticipating some fall-off in usage, the city still projected that the new fee schedules would raise $6.3 million in additional revenue in 2012. The decline in sales of tennis permits and recreation center memberships was far steeper than expected, however, and the gain in revenue totaled roughly $1.1 million—a fraction of what had been expected.
Perhaps equally troubling, the sharp drop-off in parks usage runs counter to the Bloomberg Administration’s anti-obesity and other health policy initiatives.