LAUNCESTON City Council general manager Robert Dobrzynski believes that a legal challenge by private gym owners against council plans to open a gym at Launceston Aquatic are baseless and would most likely fail.
A group of private gym owners plan to take the complaint of improper competition to the state's Government Prices Oversight Commission.
They allege the facility is to be subsidised by ratepayers.
But Mr Dobrzynski denied a cross subsidy and said the gym would actually reduce the aquatic centre's annual deficit of $1.6million.
He said that gyms were part of a typical service model of Australian aquatic centres and dropped the cost to ratepayers.
"[Launceston Aquatic] was always designed to have dry facilities in there and those facilities have been sitting there dormant at a significant cost to the community in terms of bottom line losses," Mr Dobrzynski said.
"We're not aware of any legal challenges that have been successful for leisure centres that initiated dry facilities to reduce their operating costs when challenged by other gym operators in the area.
"The objective isn't to use ratepayer funds to subsidise the gym operation, it is to provide dry facilities to gain greater revenue and reduce the $1.6 million deficit on that facility. You could argue it is subsidised competition if it's running at a loss but even then you have to look at the true cost of running the centre."