Athens Wave Pool
Introduction: A New Wave Pool Explored
Athens County Parks and Recreation District currently faces significant problems
from an antiquated pool and increasing cost of operation. The Recreation District
is investigating the replacement of the facility in order to provide the citizens of
using a wave-acting mechanism that is set into motion for ten minutes out of
every thirty minutes. The waves add a dynamic element that increases the
experience of visitors. This addition will add a unique experience that in turn will
increase interest from local residents as well as people outside the community.
The following report identifies two types of bonds that could be used for funding
the wave pool, as well as a third combination option. Later we identify what we,
as exemplary financial planners, feel to be the best, most economically feasible
option.
Option One: General Obligation Bond
The issuing of bonds is the most common way for a city to generate the money
needed for new facilities. Our first option for funding the new wave pool is to
enter into a general obligation bond. A general obligation bond is a full faith and
credit obligation bond that has almost no risk and low interest. This type of bond
is issued by a government entity and therefore is secured with the property tax.
Then take payment and divide by value of the property in Athens Park and
Recreation District ($190 million).
$362, 531.84/ $190,000,000 = 0.0019 or 1.9 mills
In order to view results from the analysis, please refer to the Break Even Analysis
spreadsheet [Brown 2e Ch08 Case Analysis Solution 1_Excel], which indicates
that a general obligation bond will not work at minimum attendance. However,
by referring to the Higher Attendance Analysis spreadsheet [Brown 2e Ch08 Case
Option Two: Revenue Bond Option
As stated previously, bonds are very commonly used when cities seek funding for
new projects or facilities. Another type of bond that may be used is a revenue
bond. Revenue bonds are non-guaranteed, meaning that there is some risk
involved, which may be perceived as a downside to revenue bonds, whereas
with general obligation bonds they were guaranteed and little risk is involved.
Revenue bonds are backed exclusively by the revenue generated from the facility
or a designated revenue source, usually a specific tax. In the case of the wave
pool, the bond would be based solely on daily admission revenue from the new
facility, which may be another negative because the facility would have to have a
certain level of admittance in order to “break even” or they would not be able to
repay the revenue bond. One good note about revenue bonds is that the general
In order to determine feasibility of using a revenue bond, a break even analysis
was performed to determine minimum number of people needed to break even
and then based on that number the total revenue that would be generated. The
calculation is as follows:
Operating cost including interest to be repaid= $588,855.00
Average unit cost = $4.00
In order to view our analysis of this option, please view the Break Even Analysis
spreadsheet and the Higher Attendance Sample Analysis spreadsheet in order to
see that this option is not feasible. Revenue bond was not examined at
maximum optimistic attendance, which might work. However, even if at
maximum predicted attendance the bond did result in success on paper, that
would mean that the wave pool must attain that many users every year for real
success to occur, which we predict would be very difficult.
Option Three: A Combo, The Best Choice for Funding
Upon examining each type of bond, we recognized that just using one or the
other would not be the best route to take. As planners of the new wave pool
facility, we feel that using a combination will suit the project best. In an effort
The Plan…
1. Primary Funding Source
Revenue Bond: $2,700,000
Our team of financial planners will use a revenue bond in order to finance the
construction and materials of a new wave pool in Athens, Ohio. The bond will be
2. One Time Grants and Donations
National Park Urban Recreation Development Grant=$700,000
This grant is available to rural communities that strive to develop community
projects that aid in the leisure pursuits of the county in which the funds are
given.
Walk to Waves =$100,000
The Walk to Waves program consists of one thousand bricks that will be
Donations and City Matching = $200,000
Donations have been raised by the community for $50,000. This amount was
then matched be individual employers to equal $100, 000 total. Ultimately, the
city was able to match this amount to total $200,000 in community donations.
Total= $1,000,000.
With the addition of these one time grants and donations the wave pool was
The wave pool will charge $5 per adult and $3.50 per child. Attendance is
estimated to be 180,000 annually (approximately 60,000 adults and 120,000
children).
Special Groups= $7,500
The wave pool expects to offer group rates for different occasions, primarily
birthday parties or for summer camp use. The pass will be good for up to twenty
Pepsi Rights= $20,000
As part of the wave pool’s concession stand, a Pepsi sponsorship will be sought.
In the past, Pepsi has supported new facilities in Athens such as the Skate Park
without concession rights or OU facilities. We feel that $20,000 annually from
Pepsi to the wave pool in exchange for the exclusive soda rights at the pool is fair
and doable.
Concessions= $40,000
Except for the Pepsi rights, the wave pool will independently operate the
concessions stand. Operations will be kept simple in order to minimize expenses,
Retail Shop= $7500
In order to serve wave pool visitors more effectively, a retail shop is created that
carries basic supplies such as towels, sunscreen, sunglasses, suits, etc. Retail
sales are expected to be $7500 annually. We spoke with several people involved
with the OU Aquatics Center and worked together to generate $7,500 as a
feasible estimate of sales.
Raft Sponsorships = $10,000
One hundred local businesses will each sponsor three rafts at $100.00 for one
Instruction = $5,000
The facility will net $5,000 a year from swim instruction. Swim instruction is
Total= $810,000
4. Other Funding Sources
Naming Rights= $250,000
Naming rights for the wave pool facility will be sold for a $250,000. This amount
will be paid over a five-year period at a rate of $50,000. These rights are for the
life of the facility and/or subject to contract.
Conclusion
Overall, we feel the combination plan is the best option for funding the new