Open range: despite the West's plentiful land, people and money, the industry there faces rising business costs

Pool & Spa News, Nov 7, 2003 by AmyJo Brown

Its purple mountains, bone-dry deserts and thundering ocean have drawn pioneers across its plains for centuries. Since the first settlers braved its call, the West has been iconized as a source of prosperity.

Though times have changed, people are still mining gold from its depths. Pool & Spa News' Top 50 Builders out in the Northern half of the region steadily increased their sales over the years, grossing $186 million in 2002. Those in the Southwestern area brought in more than $347 million.

The good

Pool builders, service technicians and retailers benefit from the growing housing industry, which rarely falters. The majority of people in the West own homes rather than rent, according to the 2000 U.S. Census. California alone accounted for 10 percent of the nation's total housing units last year.

The most expensive homes are located in the West, where the median price is $214,100, according to the National Association of Home Builders. Higher prices are driven in part by more homeowners, as well as amenities and landscaping options, which positively impact the pool and spa industry.

"There are a lot of people who are remodeling houses, putting their money in staying at home," says Bruce Dunn, owner of Mission Pools, a Pool & Spa News Top 50 Builder based in Escondido, Calif.

Adds Don Bums, "The upper-end [pool] is no longer the rarity. Even people who buy lower-end pools ... want an upscale look." The executive director of SPEC, the Sacramento-based lobbying group for the California pool and spa industry, continues, "People are demanding individuality. And it has an amazing and healthy impact on the swimming pool industry."

The bad

Still, the West is not without its hardships. Energy costs are up. Workers' compensation and unemployment insurance continue to increase, and general liability costs have skyrocketed so high that many insurers refuse to cover the industry.

"Pool industry companies, from manufacturers to service technicians, across the state of California say that their growing costs in these areas alone are reaching the red zone," Bums says.

Others voice similar concerns. "The costs of doing business are increasing faster than the prices can keep pace," says Mark Henderson, owner/manager of Pool World in Spokane, Wash. "In Washington, the government's management of the state's compulsory industrial insurance system is a huge negative, and an expensive taxing system is in place."

The ugly

On top of the costs all businesses face, the Western pool and spa industry also must deal with growing regulatory compliance costs. Builders and service technicians often become targets for stricter legislation, in part because this region has one of the highest concentrations of pools in the nation. They also operate year 'round. Thus, the incidences of drowning, particularly of children, are higher than in other regions.

In addition, the West, known for its youthful, idealistic culture may inherently draw a more active constituency than other regions. In the past, groups have lobbied local governments on issues related to water safety and the environment. Though they are often defeated, proposals encouraging things such as using only natural gas or solar to heat pools are not uncommon.

"In California, for example, we have people with vested interests who will spend a lot of money," Burns says. "You don't see that everywhere."

Because of all the activity, Bums says the West, particularly California, is where many pool regulation trends begin. "We get it, and we get it hard. Then it goes nationwide," he notes.

Some of the most recent legislative woes across the West include the following:

* Barrier requirements in Orange County, Calif., have had builders up in arms. Unlike other parts of the state and the nation--the county board of supervisors adopted a building code that permits only a fence between pools and residences as a legal barrier. The industry is worried that the law has the potential to impact pool sales because many homeowners don't like what it does to their backyard aesthetics.

* In late 2002, the state of Washington required that pool and spa service technicians become licensed electricians. It's a costly law that many are still trying to comply with. Though unhappy that the law was passed, business owners say they're combining resources to educate each other on the new licensing process. A law also is in place, common in states in other regions, that requires a 6-foot fence around all portable spas.

* Massive community efforts to educate people about pool safety have been undertaken in Maricopa County, Ariz., which contains the West's fastest-growing city and the nation's highest drowning rate. With the help of many industry members, child drownings decreased 50 percent in the summer months of 2002 compared with the previous year.

Still, the campaign has sparked regulation attempts that keep the pool and spa industry actively defending itself. Most recently, an attempt was made to mandate a "warning video" about pools for homeowners to view before installing one of their own. The proposal was defeated.