Starting Oct. 1, Seward Wellness Center members will be asked to pay 7.5% sales tax on top of their monthly or annual memberships.
The city has not overlooked the state-required sales tax on center memberships, but when opening rates were set last year, those taxes were rolled into the total charge, making tidy whole-dollar numbers for people to pay.
Seward Wellness Center Director Joel Brase was before the Seward City Council Sept. 15 proposing a more visible approach to charging the sales tax by adding it on to monthly and annual memberships.
By doing so without changing the membership rates offered, the center will be asking people to pay more for their actual memberships – an increase equal to that 7.5% state and local sales tax that was not visible within their payments.
That means if an adult monthly membership has been $45, a little more than $3 was built into that rate to cover the sales tax required by state law. That meant about $42 actually went toward the membership.
The change would mean the single adult fee of $45 would all be applied to membership and members would also pay the additional $3.38 sales tax.
The $75 family membership would also pay $5.63 in sales tax that is now rolled into those memberships, making the actual membership fee something under $70 per month now, but $75 after the change is made.
Rates kept competitive
Brase said the wellness center looked at rates charged by similar centers when it opened, and wanted to remain competitive with the Fallbrook YMCA in Lincoln and the Beatrice wellness center.
“We are at or below the average of others,” Brase said. “People are getting an even better rate than they realize.”
The $5 individual day passes, however, will continue to roll in $0.375 in sales tax to facilitate cash payments and minimize the number of times staff have to make change for visitors, Brase said.
Overall, Brase said the change would add about $40,000 annually for the wellness center’s revenue.
The wellness center raised about $526,000 in membership revenue in its first year with the sales tax included in fees. Breaking the sales tax out and keeping the same fee levels would generate about $568,000, he said.
In the end, the Seward City Council approved the plan with the five members attending the meeting – Rich Wergin, Karl Miller, Jessica Kolterman, John Singleton and Megan Kahler – voting in favor of the change.
But not before they questioned whether the change would be too much for members.
Wergin questioned how residents would react to the change.
“We put the question before the citizens of Seward” to allow the collection of an additional half-cent of local sales tax to support the construction of the wellness center, he said, pointing to the 2022 vote.
He questioned whether residents would respond positively to separating the sales tax without changing the current rates.
Wergin said it will be hard for people to see that as anything other than a membership rate increase.
Kolterman agreed and Miller also questioned the intent.
“What problem is this solving?” he asked. “It is a seven-and-a-half percent rate increase on fees.”
Singleton questioned the marketability of it.
“Citizens will look at it as gouging. We do not want to turn people away,” Singleton said.
But Mayor Josh Eickmeier said he would use that term “carefully.”
“It is no different than the sales tax we are charging on everything else,” he said.
Other city fees taxed
He said the city could review how it handles sales tax at the swimming pool, golf course and other places, too.
“This honestly is something I had not given much thought to,” he said.
City Administrator Greg Butcher reminded the council that the wellness center and golf course are expected to be self-supporting, while the pool has always been taxpayer supported.
“The other half of this conversation,” he said of the wellness center fees, is implementing a scholarship program to assist those who may not be able to afford the full membership rates.
“We have funds within this program to make sure that everybody does have access. We have specific funds to use for those children,” Butcher said.
The council also endorsed plans Brase presented to utilize funds from the Joan Kruse Rogers endowment fund to provide scholarships for children with financial need.
He said the fund is already being used for youth programming and childcare programs as outlined by the gift.
Fund seeks broad engagement
Rogers grew up in the Seward area and returned for visits with her husband Hugh Rogers.
She bequeathed the proceeds from the sale of her family farm to establish an endowed fund that will provide annual gifts to the wellness center to be used to engage all residents in its activities. The gifts may be used for operational and programmatic purposes and, specifically, to benefit those who might not otherwise be served by the center.
Brase said he and other wellness center leaders have proposed setting aside a specific amount of the funds available from the fund to provide 50% scholarships.
Eickmeier was supportive of the plan but encouraged Brase to make the selection process as objective as possible and not “grueling,” perhaps utilizing a family’s qualification for free- and reduced-price school lunches. That would place the designation of need within an established structure.
Miller suggested having a waiting list for such aid if needed so all qualified applicants would have an opportunity to receive assistance at some point.
Brase said the center had used such a system when working with the center’s before- and after-school care program fees.
Eickmeier said he is appreciative of the fund’s existence.
“We are very fortunate to have this donation for this purpose. This is a great opportunity to have,” he said.
