Report to: Budget Sub-Committee Report
Date:
SUBJECT: Fitness Initiation Fees
PREPARED BY: Colin
Service, Manager Planning & Policy, Ext 7543
RECOMMENDATION:
That the report entitled Fitness Initiation Fees be received;
And that the Town of
And that Council endorse an
increase in the one time initiation fee to $90.00 annually, from the current
$62.50 per person, representing an increase of approximately $23,061 on an annualized
basis;
And that Council endorse an increase in the one time initiation fees to $120.00 annually for adult non-resident from the current $26.00 per person, with a projected increase of approximately $2,475 on an annualized basis;
And that there is no initiation
fee for student membership categories, again consistent with industry standard;
And that this initiation fee takes
affect March 1, 2009;
And that By-law 2002-276, a by-law
to impose fees and charges for services or activities provided or done by the
Town of
And further that notice to the
public be provided in accordance with By-law 2002-275, a by-law to prescribe
the form and manner and times for the provision of reasonable notice;
And that Staff be authorized and directed to do all things necessary to give effect to this resolution.
PURPOSE:
The purpose of this report is to find alternative revenue generating opportunities as part of the E3 initiative. As well, revenue generated will be utilized in offsetting increase in part time wages that will occur in moving towards a formalized part time wage grid.
BACKGROUND:
Currently, new members are paying
a higher fee when joining one of our fitness facilities. The fees are as follows:
|
Category |
New Member Fee |
Renewal Member Fee |
Price Difference |
|
Adult Resident |
$544.50 |
$482.00 |
$62.50 |
|
Spousal |
$1,037.00 |
$859.00 |
$178.00 |
|
Senior Citizen (65+) |
$377.50 |
$335.50 |
$42.00 |
|
Adult Non Resident |
$570.50 |
$544.50 |
$26.00 |
|
Spousal Non Resident |
$1089.50 |
$932.50 |
$157.00 |
|
Student |
$398.50 |
$398.50 |
$0 |
Once a member has completed their
first year of membership, the fee for all subsequent years is the Renewal
Member Fee. It should be noted that in
promotional materials the additional fee for new members will be separately
noted as an initiation fee.
When looking at single adult memberships
(the primary financial driver for fitness facilities), please note the
following comparison in pricing for annual fees excluding any form of
initiation fee:
|
|
|
|
YMCA |
Good Life |
|
$482.00 |
$542.00 |
$418.08 |
$559.68 |
$767.00 |
It is difficult to compare
initiation fees within the fitness industry as this fee fluctuates dramatically
with promotions for the particular club.
However, below is a comparison of the average of initiation fees for the
particular club:
|
|
|
|
YMCA |
Good Life |
|
$62.50 |
$75.00 |
$100.00 |
$75.00 |
$100.00 |
It should be noted that a
comprehensive fitness assessment and personalized program development is
included with the purchase of each new membership at a Town of
OPTIONS/ DISCUSSION:
An increase to a consistent
initiation fee of $90 for resident and $120 for non residents annually would
not impact existing users of the fitness centres. Existing members will continue to pay the
Renewal Member Fee.
Recommended initiation fees are
well within industry standards. It is
acceptable within industry standard and allowed by the Consumer Protection Act
to charge an initiation fee of up to 25% of annual cost of membership. Proposed initiation fees on average is 20% of
the annual cost of membership.
We are also recommending a change
in policy to increase fees to non-resident adults. It should be noted that the base annual
membership fee is already significantly higher for non residents. Increasing the initiation fee will ensure
consistency with the initiation fee and base annual fee. Consistently other municipalities in
Notice of fee increases will be provided on Town Website and
Town page of local Markham Newspapers.