Question 1

Basically, we are going to discuss three different alternatives to provide

swimming opportunities:

1. Building a total of 3 pools, which presumably will be of larger size

Olympic size.
2. Building a total of 6 pools, which will be of smaller size standard
size.
3. Not building any pool, but providing a bus service to a beach park
nearby.

Well start with the case of building pools. First we need to estimate the
demand, i.e., the amount of people that will attend the pool daily. I
considered 80,000 to be the total population of the Model Neighborhood.
Given that everybody is within the radius of influence of the pool, I just
divided the total population by the number of pools.

3 6 pools
pools
Population 26667 13333
distribution
Estimated 267 133
attendance (1%)
Estimated 1333 667
attendance (5%)
Average attendance 800 400

Now, I will consider the capacity of the pools, given the 19 ft 2 needed per
swimmer.

Olympi Standa
c rd
Sq 11700 5000
feet
People 616 263

In the light of these results, well need Olympic pools for the case of three
pools, while well might do it with standard ones if we construct up to six.
However, given the pool capacities, Ill assume that the demand will
decrease a little bit, since they will be overcrowded.

Thus, considering a reasonable oversaturation of the pools, I will assume the

following values for pool demand.

Olympic Standar
d
Daily 700 300
Attendance
Now Im ready to calculate costs and revenues for each size of pool. For the
daily revenue, I used $0.15 per person admission fee.

Costs (per pool) Olymp Standa

ic rd
Construction cost 27890 127900
0
Land cost 60000 240000
0
Initial cost 87890 367900
0
Annual cost 39100 20800
Taxes 3280 1312

Revenues (per pool) Olymp Standa

ic rd
Daily 105 45
Annual (240 days 25200 10800
approx)

Finally, I will perform the Cost-Benefit analysis for the total number of pools.
I will use a Present Worth (PW) approach, considering a reasonable value for
the discount rate i=5%.

PW of cost 40700 370315

85 3
PW of revenues 85231 730559
9
NPW 32177 297259
65 3

These results indicate that building 6 standard pools is a preferable option

over the 3 Olympic pools case, since the net cost is lower. Although
changing the discount rate changes the numerical results, the superiority of
this option still holds.

Lets now consider the third option: providing a bus service to Crandon Park.
The costs involved in this option will depend on the number of daily buses
that will connect with the beach park. This number of buses will in turn
depend on the demand, which as of now is unknown. However I will assume
a reasonable number, which will cover a certain percentage of the total
population.

Buses provided 15
 Number of swimmers 1080
served
% of total population 1.35

Using these conditions, I computed the costs. For the number of recreational
leaders needed, I assumed that 2/3 of the bus passengers were children.

Cost of 660
buses+drivers
Cost of leaders 438
Total annual cost 17787
6
NPW 20053
86

We see that this option would be cheaper than the two previous ones. The
amount of buses at which this option becomes more expensive is 23 (2.1%
of population served).

Question 2

Now that I have analyzed the different options, my recommendation is to

construct 6 standard size pools. I consider this option preferable because
although bus service is cheaper, it has a major disadvantage: it requires you
to go to the bus station and travel for 1 hour, while the pools would be
accessible in less than 2/3 miles walking distance.

Question 3

In this analysis several data is missed. I would want more accurate values
for the estimated demand; a value for the discount rate; an estimate for the
demand for bus swimmers; the size of the fleet of buses (which would match
the demand); and also the estimated proportion of children going to the
beach park.