Swim Club Demise? Drowning in Debt

It may not have been on Tuesday night’s Township Committee meeting agenda, but the sinking fate of the was the public comment focus of the night.

Rumors about what’s to going on with the club have been swirling like the water in a freshly snaked drain. In an effort to quell misconceptions, township officials issued a on the subject on Friday.

The bottom line: The township can no longer afford to run the club and keep it above water.  What is supposed to be a self-sustaining, fee-supported utility, officials said has, for the past three years, become a burdensome money pit.

Membership is down. Revenue is down — by $101,000 this year alone. So, the club’s viability has all but sunk.

Of the mind that there’s enough buoyancy left to toss the club a community spirit life preserver, a capacity crowd packed the Tuesday night.

Township officials told them the battle is not quite over yet and they have been grasping at the side of the utility’s life preserver by seeking out private managers, who would run it in place of the township. They will have an answer to that option from prospective managers by mid-February.

“What we have said is we’re trying to find someone to operate it,” Township Administrator Anthony Mercantante said. “We’re serious about that. Our main goal right now is working at that. That’s the only real hope now and going into the future. Hopefully it will work out. No guarantees, but, hopefully it will.”

Regardless, for right now, residents offered their own ideas to keep the club above water. They cheered and jeered.

They blamed the club’s lack of sustainability on poor management at the hands of former Parks and Recreation Department Director Gregg Silva. They blamed it on the township not succeeding in keeping non-members out. They blamed it on lack of vision and the township not asking for donated maintenance services and fee hikes.

Resident Tracy Lewis was first to the mic. She bandied ideas about, including using parent groups for assistance in running the club. “There are a lot of really wonderful aspects (to the club) for Middletown,” she said. “Maybe you could make some change before we have a situation … not opening it. There are ways that we can make money and see it run.”

There were roughly two more hours worth of pleas, from management concepts to families’ children reading prepared statements about their quality of life and hearts being crushed with the closing of the club.

But, in the end, residents heard much of what they didn’t want to hear — that while no one is saying they want the club to go completely under water, officials have been holding their breath a little too long.

“There’s not one person on this committee that doesn’t enjoy the pool club or believe the pool club is a great facility,” Mayor Tony Fiore said. “But by ordinance, the Swim Club must be a self-sustaining utility for us to operate it.”

It is no longer self-sustaining and has been operating in the red since 2008, after draining fee-supported surplus and seeing membership decline by roughly 40 percent.

The history

That ordinance, setting the club up as a “self-sustaining utility,” was adopted in 1997 when the township bought the club for just over $1 million from a private owner who wasn’t realizing a profit on it.

The purchase was viewed and as a preferred alternative to a Home Depot, which was set to go in the spot; and no one wanted that, Mercantante reminded the crowd.

Running the club as a utility means that the township would be in charge of managing operations of the club that is open to township residents who pay a membership fee.

“Let me be clear,” Fiore said outside of the meeting. “The governing body cannot break an ordinance to change its intent and put (the cost to run the club) on the backs of everyone else (including those who are not members of the club).

"At the time of the purchase of the swim club, by using the structure of the private fee support and treating as a utility, the governing body wanted to be sure the place would be self-sufficient and not a burden to taxpayers. The committee created a utility because of the fee/revenue structure, so that it would be outside of the township budget. A utility is a structure that a governing body can create to operate outside of the general municipal operating budget.”

The budget facts

Even if this governing body wanted to change that ordinance and its restrictions, making the club public, it would have to be supported by taxes and completely open to township residents.

That, especially in light of Gov. Chris Christie’s mandate to keep the municipal tax levy capped at a maximum 2 percent increase, is not even in the realm of reality as an option, officials all said.

To do so would be only at an astronomical, unaffordable cost, Township Attorney Brian Nelson said.

Membership and revenue have both dramatically declined. And any past surplus was drained to keep the club open.

“It’s still a losing business proposition,” Fiore said. “Any changes made didn’t increase membership.”

Squelched rumors and more facts

The Middletown Swim and Tennis Club has not been sold. And there is no contract to sell the club to a developer who wants to build condos on the site. Nelson, saying he was sick of hearing unfounded rumors of sales and developer deals, put it all to rest, exclaiming that none of it is true. If the township wanted to sell the club, it would be a very long, very public process, he said.

Despite the expressed desire to run fundraisers for the club, there is no quick fix. The club has been operating at a loss for too long.

There is no staff to run it this summer. In keeping with budget austerity, most of the Parks and Recreation staff was laid off with the adoption of the 2011-12 budget.

A resident, who said she was a truancy officer, offered the concept of having juveniles in trouble with the law work at the club as a form of community service. It’s not a viable option, officials said.

Calling the situation the “perfect storm,” Committeeman Gerard Scharfenberger reminded the audience that “We are in the throes of one of the worst economic recessions of all time.” Cutbacks are status quo, he added, just as they are in your own households.