Lichfield District Council says the operator of leisure centres in Lichfield and Burntwood will be supported until at least March 2021.
Sites are due to begin a phased re-opening from 25th July.
Burntwood Leisure Centre is set to open first, with Friary Grange to follow further down the line.
The facilities are both operated by Freedom Leisure on behalf of Lichfield District Council.
The coronavirus has already seen the local authority spend £240,000 – and a report on the reopening of the leisure centres says the figure could rise by a further £838,000 over the next year.
A report to an overview and scrutiny committee meeting this week said:
“The closure of leisure centres created an immediate cost pressure as income ceased.
“Even those authorities and providers who chose to furlough staff were left with significant overheads that could not be mitigated.
“Hibernating centres still require security, a degree of maintenance and draw on utilities. Lease and license costs also continue. When centres reopen, the cost pressure is anticipated to continue to accumulate and potentially accelerate.
“Costs will quickly build to near pre-COVID levels, with additional costs to support COVID-safe operation. Income, however, will likely be much slower to build due to operating restrictions, limited capacity and depressed demand.
“Industry estimates suggest that income in the first 12 months following re-opening will be reduced by 30-40%.
“To support the continued functioning of the leisure contact, Lichfield District Council has agreed to provide financial support to help Freedom Leisure manage their operating costs until the end of March 2021.
“This will ensure the continued viability of the local contract and facilitate a return to service provision as soon as allowed by Government.”Lichfield District Council report
Although Government support has been provided to help councils cover the costs of coronavirus, none of it has been directly earmarked for leisure provision.
The report reveals that discussions had taken place over the long term management of the leisure centres.
“The option to bring the service back in-house was considered, but at this stage has been discounted.
“Delivery through Freedom Leisure is cost efficient. As a charity they benefit from NNDR relief worth around £190,000 per year.
“Exiting the contract would be legally complex and would see Lichfield District Council inherit a range of additional risks for little discernible benefit.
“This option will remain available should circumstances change.”Lichfield District Council report
The report will be discussed at an overview and scrutiny committee meeting on Thursday (16th July).