Penticton council rejects two-tiered recreation rates

Report finds charging outsiders more could actually decrease revenue

People living outside the city of Penticton will continue to pay the same rates for recreation services as residents, after council voted Monday to reject the concept of tiered pricing.

The idea of charging a premium rate for users of the city’s recreation facilities who live outside the city and not paying into the municipal taxes that build and support them, has been bandied about for years, with Coun. John Vassilaki as one of its most ardent supporters.

But after hearing a report from Chuck Loewen, Penticton’s general manager for facilities and recreation services, showing possible revenue losses with tiered pricing, council voted to retain the current pricing structure.

Back in 2010, Penticton developed a tiered pricing model but asked, through the Regional District of Okanagan-Similkameen, that other participating communities chip in tax dollars instead. The RDOS rejected the proposal.

“West Bench was the only exception to this decision and provided, and continues to provide, the city with $20,000 in annual support,” said Loewen.

Tiered pricing wasn’t implemented and in 2011, Penticton city staff brought forward a report comparing the tiered pricing with a loyalty club model, which was launched in February 2013.

That loyalty club, Loewen said, was a better model for increasing revenue and decreasing the need for a city subsidy of recreation facilities. Even though it was launched quietly, he said, it is already effective.

“The launch of this club has produced more than 215 members in less than six months and an additional $8,500 in revenues,” said Loewen.

“Through promotion and expansion of offerings and options marketed to existing and potential members, and developing sophistication with exclusive offerings and rewards to members, increased use and activity will increase revenues and reduce subsidies.”

Vassilaki, who brought forward a motion earlier this year asking staff to prepare the cost-benefit analysis, was disappointed with the result of the vote.

“I disagree enormously with the losses that you are predicting … if we go to a two-tier system,” said Vassilaki. “I believe that it is not fair for our taxpayers to pay for other people’s recreation that do not contribute to our city.

“I think the citizens of Penticton deserve better. I think they are paying for other citizens to come and use our facilities.”

Coun. Helena Konanz also spoke in support of tiered pricing, questioning why the report was based on a minimum 25 per cent premium for non-ratepayers. Other cities, she said, worked more in the 10 per cent range.

“The point is, it is respect to our taxpayers. It doesn’t have to be an incredible amount, just something to show that the taxpayers in Penticton are treated a little different than the people who don’t pay taxes in this city,” said Konanz.

Mayor Garry Litke, however, felt that the recreation department was being successful with the direction they were following, with revenues climbing and city subsidy dropping.

“Obviously that place is getting used more than we intended and it is showing in the numbers,” said Litke.

Council voted 5-2 in favour of maintaining the existing pricing structure, with Vassilaki and Konanz opposed.