The 25-Year Cost of the Pool — A Picture, Not a Forecast

This is a working picture of the full cost of building and operating the pool over 25 years. It is meant to give citizens and Council a sense of the scale of the commitment. The real numbers will vary.

Construction is stated to be covered by taxes already passed by Cañon City voters. Those revenues have not been verified for the purpose of this document. For the picture below, the construction cost is treated as a round number — $24 million — financed over 25 years at current municipal bond rates, with debt service paid from the voter-approved revenue stream.

In other words, the construction piece is not a new ask on residents. The question this document is concerned with is what comes after construction: the operating cost the city budget would carry.

• Construction cost (round number): $24,000,000
• Bond term: 25 years
• Annual operating cost (rough estimate, today's dollars): $1,200,000

These are working numbers. They have not been independently verified for this document. They are sufficient to draw a picture of scale. They are not sufficient to make a final decision. The real numbers will vary.

The bond interest rate. A small Colorado municipality issuing a 25-year bond in today's market would likely see a rate somewhere between 4.5% and 5.5%, depending on credit rating, the security pledged to repay the bond, and market conditions on the day of issuance. Long-term municipal bond yields are currently near their highest levels in over a decade. Three scenarios are shown below to capture the range.

Operating cost inflation. $1.2 million per year is in today's dollars. Real operating costs will rise over 25 years. A standard planning assumption is 2.5% to 3% annual inflation. The figures below first show operating costs held flat — which understates the real number — and then show what they look like with inflation factored in.

Scenario A — 4.5% bond rate

• Annual debt service: $1,618,560
• Total debt service over 25 years: $40,464,000
• Total interest paid: $16,464,000

Scenario B — 5.0% bond rate (middle estimate)

• Annual debt service: $1,702,800
• Total debt service over 25 years: $42,570,000
• Total interest paid: $18,570,000

Scenario C — 5.5% bond rate

• Annual debt service: $1,789,200
• Total debt service over 25 years: $44,730,000
• Total interest paid: $20,730,000

Using the middle scenario (5% bond rate) and holding operating costs flat at today's dollars:

• Bond debt service: $1,702,800 per year → $42,570,000 over 25 years
• Operating cost: $1,200,000 per year → $30,000,000 over 25 years
• Combined annual cost: $2,902,800 per year
• Total 25-year cost: $72,570,000

Holding operating costs flat for 25 years is unrealistic. With inflation factored in:

• At 2.5% annual operating cost inflation, the 25-year all-in total rises to approximately $83 million.
• At 3.0% annual operating cost inflation, the 25-year all-in total rises to approximately $87 million.

The pool is a roughly $72 to $87 million commitment over 25 years, depending on the bond rate when issued and operating cost inflation. That includes $24 million to build it, $16 to $21 million in interest on the construction bond, and $30 to $43 million to operate it. Annual cost during the bond period is approximately $2.9 million — roughly $1.7 million in debt service and $1.2 million to operate.

Again: this is a picture, not a forecast. The real numbers will vary.

Two distinct funding questions sit inside the picture above.

The construction side — the $24 million build cost and the $1.7 million per year in debt service that comes with it — is stated to be covered by taxes already passed by Cañon City voters. That is the voter-approved piece. It is not a new ask on residents through this document.

The operating side — the $1.2 million per year to run the pool — is the question this document and the Realignment Analysis are concerned with. Of that $1.2 million, the plan proposes funding a significant portion — $500,000 per year — from the city budget without new taxes or new fees. The remaining $700,000 per year is anticipated to come from user fees, the Recreation District, or other sources.

User fee revenue is not estimated in this document. That is a separate analysis.

These numbers are gross, not net. The pool will generate revenue from user fees, swim lessons, programs, and rentals. The net operating subsidy required is $1.2 million minus whatever the pool earns back. This document does not estimate that earned revenue.

The numbers are not independently verified. The $24 million construction cost, the voter-approved tax revenue, and the $1.2 million annual operating cost are working figures. Before any final commitment is made, each of those numbers should be confirmed against current cost estimates, recent operating data from comparable pools, and the most current revenue projections from the voter-approved tax.

Rates are not locked. Until the bond is structured and sold, the interest rate is a moving target. A shift of 25 basis points in either direction changes annual debt service by roughly $40,000 to $60,000 per year.

This is a picture, not a forecast. The numbers above are meant to give a sense of scale. The real numbers will vary — likely materially — based on final cost estimates, final operating projections, the actual bond rate at issuance, and inflation over the next 25 years.

Whatever the city decides about the operational piece, the full 25-year scope deserves to be on the table. The pool is one of the largest commitments Cañon City has considered in a generation. Citizens and Council are entitled to see the numbers in their full scope — construction, interest, operations, and inflation — before that commitment is made.

The picture in this document does not decide anything. It frames the conversation. The conversation about what the city is willing to do, and on what terms, is still ahead of us.