On Monday, November 16, the Village Board reviewed the RecPlex 2021 budget and Village responsibility to partially fund the $2.5 million debt service payment with tax levy. Since the facility opened in 2000, RecPlex has operated under the policy that no taxpayer dollars would be used to support this comprehensive fitness center.
“I believe the Village can be proud that for 20 years it has held true to its promise,” said Village Administrator Nathan Thiel, “However, that promise was not made with a national pandemic in mind.”
The 2021 Rec Plex budget projects the COVID 19 impact will negatively affect net revenues by $1.8 million. In summary, the 2021 budget anticipates $7.5 million in net revenue and $6.7 million in operational expenses; compared to the 2020 original budget of $9.3 million in net revenue and $6.9 million in expenses. While 2021 revenues will cover operations, the remaining funds are insufficient to cover the $2.5 million in debt payments. Because the facility is municipally owned, that shortfall becomes the responsibility of the Village. Municipal ownership allowed the Village to take advantage of lower interest rates with General Obligation (G.O.) Bonds, when it constructed or improved the facility. However, by issuing G.O. debt, the Village also assumed the risk to back that debt with its tax base. The Village is proposing a $1.5 million tax levy increase to partially cover debt principle.
In recognition of the taxpayer support, RecPlex will offer Pleasant Prairie taxpaying households five guest passes to use the facility ($55 value), free Lake Andrea beach access ($45 value), and a free parking pass with a RecPlex membership ($30 value). These offerings are in addition to contributions and value RecPlex already has and continues to make to the community.
Significant contributions back to the community include:
1.
Annual payment to the Village: In 2021 RecPlex will pay $487,240 for administrative services to the Village General Fund, which reduces the tax levy burden. Over the past decade, RecPlex contributions to the Village total $4.13 million.
2.
Resident discount: Currently residents receive a $4.00 discount per month on an individual membership, which equates to almost one month free annually. For residents 60 and older, a senior membership receives a $17.33 discount per month.
3.
Economic Impact: In 2019, conservative estimates calculate that RecPlex events stimulated $7.18 million in tourism spending and economic impact.
“RecPlex boosts occupancy levels, specifically on weekends, year-round,” said Kyle Highberg, First Hospitality Area General Manager. “Their weekend tournaments contribute to the local economy, specifically at times when hotel occupancy levels would be traditionally low in other markets. RecPlex also introduces visitors from other areas of the country to our community, further adding to the Village's economic impact.”
In preparing the proposed 2021 budget, Village staff exhausted efforts in search for alternatives to a levy increase including debt refinancing and state and federal assistance. Because the facility is municipally owned, RecPlex did not qualify for federal or state aid.
“Just as private businesses, families, and individuals received Federal stimulus earlier this year, it isn’t unreasonable that the RecPlex require relief as well,” said Thiel, “Especially, considering how much the facility has given back to the community.”
