After eight years and a lot of public criticism, Servus Place has surpassed its cost recovery goal and generated a profit.
A report released this week said the recreational multiplex was turning in a $48,109 net surplus for 2014, putting it at a 101 per cent cost recovery rate.
It generated $8.58-million in revenue in 2014 and had $8.54-million in expenses.
That surplus includes a profit of $53,190 at the controversial Starbucks that’s run by the city at Servus Place. The net profit was $88,190, but $35,000 was transferred to reserves.
“Year over year we’ve continued to increase our cost recovery,” Enger said. In 2013, cost recovery at Servus Place was 92 per cent. In 2007, a year after Servus Place opened, cost recovery was 68 per cent.
“For me, really, the true success is that it’s a highly utilized facility that’s efficiently operated,” Enger said.
The surplus goes back to the city’s general revenues, where it’s part of an overall 2014 operating surplus.
The report notes Servus Place is now under a new financial management structure, which Enger said involved amalgamating the Servus Place and recreation services departments and other efficiencies.
Servus Place revenues included $2.7-million in memberships, $1.6-million in admission fees, $1.1-million in lesson fees and $1.76-million in facility rental revenue.
There’s also $604,277 in advertising or sponsorship revenue and $721,616 in sales.
Expenses include $4.1 million in personnel costs, plus contracted and general services, utilities, supplies and transfers to other related city departments like aquatics.
The 101 per cent cost recovery applies to the operating costs of the facility, but does not cover any capital improvements or repairs that might be needed. Enger said those are included as part of the city’s overall 10-year capital plan.
The 101 per cent exceeds some regional neighbours’ own cost recovery rates on their recreational facilities. For instance, in 2013 the TransAlta Tri Leisure Centre in Spruce Grove had an 83 per cent operating cost recovery rate.
The report shows nearly one million people visited Servus Place in 2014, with about 2,700 going through the doors daily.
Membership sales were steady in 2014. About 72 per cent of the memberships are bought by St. Albertans, with 18 per cent coming from Edmonton, and another 10 per cent from Sturgeon County, Morinville and other areas.
Enger pointed to high ratings on the biannual customer satisfaction survey that is conducted as another success story. The survey showed 96 per cent of Servus Place users were either somewhat satisfied to very satisfied with their experiences.
Enger said that indicates the facility has responded to feedback to better meet customers’ needs.
Mayor Nolan Crouse is delighted to at last see Servus Place achieve full operating cost recovery.
“It was founded based on 100 per cent cost recovery and I feel a little bit like we’ve made it,” Crouse said. “For some reason it was thought to be cost recovery neutral … in its first year. I look back and wonder what we were all thinking, it’s going to take some time.”
Crouse noted there was a huge public backlash in 2007 after Servus Place failed to immediately reach cost recovery status.
“Took too long to get here, but it’s here,” he said.
